The leap in assets at Credit Suisse’s private bank to a record high this year has been aided by a key plank of the bank’s new strategy: lending money to the world’s ultra-wealthy. Switzerland’s second-biggest bank is trying to lure more rich customers by helping them fund their businesses and lifestyles, with shipping, aviation and real estate loans a central focus.
“From the bank’s point of view, the deposits and private wealth product is the juice; the value to the bank has to be strong enough to consider making risky loans,” said Basil Karatzas of New York-based shipping finance advisory firm Karatzas Marine Advisors. Finance sources estimated Credit Suisse’s exposure in shipping alone was at least $12 billion.
Experts say Credit Suisse’s new tack of lending via its private bank has helped it make significant inroads with Greek shipping magnates – among the richest in the industry – in the past year, capitalizing on RBS’s exit from Greece. Leading Greek shipping tycoon John Angelicoussis is among those Credit Suisse has helped finance, Thomson Reuters LPC data shows.
“Presently, Credit Suisse seems to be shedding off part of the smaller [ship] owner portfolio and those who are not top-tier names with top-tier deposits,” said Karatzas. “There is a focus away from the transactional aspect of business towards the relationship-driven business that lowers costs and risks but also builds up on the bank’s traditional core strengths.”