C.Suisse private bank to grow 20+ pct in Asia-INTERVIEW-UPDATE 1

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Wednesday September 15, 2010 04:27:12 PM GMT

* Private bank CEO says margins still at around 120 bps

* C.Suisse Asian target for NNM was 15-20 percent for end-2012

* CEO Berchtold-C.Suisse continues to attract new inflows

* Says hiring in Asia has become more difficult

* Sees Switzerland remaining main wealth management hub

By Lisa Jucca, European Wealth Management Correspondent

ZURICH, Sept 14 (Reuters) - Credit Suisse's private banking chief told Reuters Insider TV net new assets from rich clients in Asia will grow well above 20 percent, higher than the 15 to 20 percent annual growth the bank is targeting for end 2012.

Private banks are increasingly focusing on the Asia-Pacific region as wealth is expected to grow faster there than in traditionally rich Western nations.

"We have a target rate of roughly 6 percent growth across the entire private banking landscape and I would expect Asia to go well above 20 percent in the circumstances we are currently in," Walter Berchtold, Chief Executive Officer for Private Banking said in an interview on Tuesday.

Swiss-born Berchtold, who has spent nearly 30 years with Credit Suisse, said Switzerland's No.2 bank by market value continued to attract net new assets from wealthy customers into the third quarter.

"Yes, it still looks promising," he said when asked whether the bank was still attracting assets from rich clients.

Credit Suisse, which was able to survive the credit crisis without government help, won nearly 14 billion Swiss francs ($13.96 billion) of new private bank client money in the second quarter of 2010 while larger rival UBS was still bleeding assets.

But Credit Suisse's gross margins, which have fallen by 10 basis points to 121 basis points at the end of June from end 2009, have not yet recovered.

"Margins came off from very lofty levels compared with the rest of the industry," said Berchtold, whose investment banking background includes a period as a trader at Credit Suisse First Boston.

"They are still extremely healthy and I expect them to stay around these levels currently."

He saw however huge potential for margins to rise again once cash-rich clients started to abandon their cautious stance.

"The leverage on the upside is tremendous. The need for integrated solutions will come back, investors' behaviour will change and that is then the time when we see margins rebounding from these levels," Berchtold said.

HUNT FOR TALENT GETS TOUGHER

Berchtold, whose division generated more pre-tax income than the investment bank in the second quarter of this year, was still looking to hire in Asia, both on-shore and offshore, but said the fight for talent was becoming tougher.

"It has become recently more difficult because rates have gone up. Relationship managers' quality is not the same any more as what we used to find in 2009 when we did our big hiring spree," he said.

Berchtold said Singapore was well-placed to become an increasingly attractive wealth management hub.

But he did not believe Switzerland had lost its shine, despite international pressures on its treasured bank secrecy.

"I do not know how (Singapore) will look like in 20-30 years. It is certainly well positioned," Berchtold said.

"In the short-term, even though we have some problems with bank secrecy, I still think Switzerland is still extremely well placed," the former precious metals and options trader said.

"The race will go on, but Switzerland will be leading for quite some time to come."

(additional reporting by Albert Schmieder; Editing by David Cowell)

($1=1.003 Swiss Franc)

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