A Strong Partner
It is a challenging time for Swiss companies. This represents an opportunity for Credit Suisse to underscore its reliability as a partner, as André Helfenstein, Head of Corporate & Institutional Clients, points out.
Urs Schwarz: What has pleasantly surprised you since you took over as Head of C&IC six months ago? What challenges are you facing?
André Helfenstein: Our business is crucial for the Swiss economy and our global clients, which is something we can be extremely proud of. One very positive aspect is our attractive client base, which is favorably disposed toward us – and this is not always the case in Switzerland. In addition, our business is well diversified and occupies a strong market position. And then we have a very committed, highly skilled workforce, which is extremely important, of course. A particular challenge is the negative interest rates following the Swiss National Bank (SNB) decision to eliminate the minimum exchange rate for the Swiss franc against the euro. We also need to find ways to deal with a less favorable balance sheet and gain additional market share in our well-developed home market of Switzerland. Given our strengths, however, I am firmly convinced that we can meet these challenges. I look forward to successful cooperation with our employees and teams to the benefit of Credit Suisse.
With Corporate Solutions, you have created a new department that consolidates all of the solutions provided to the various front-office areas within the corporate client business sector. What do you hope to achieve?
This new setup enables us to develop products and services spanning multiple business areas and make them available to our various client segments, including small and medium-sized enterprises, large Swiss corporates, transportation, and global finance. In addition, it allows us to bundle our innovative efforts and simplify our processes. This will also relieve the front office of certain administrative tasks, for example by creating the new C&IC regulatory office, which is assuming responsibility for and simplifying forms and procedures. We believe that this will allow us to maintain and even increase our current rate of growth.
Where do you see the greatest opportunities for growth?
Most of our business areas offer considerable room for growth. In Switzerland, we are making targeted efforts to gain market share, for example in our SME business. Owing to the large number of companies in this category, there is a great deal of movement. Demand is high for certain products, such as leasing, factoring and private label funds. And we are looking for big-ticket arrangements with large companies and institutional clients. Over the past few months, we have succeeded in concluding several major deals.
Internationally, we are seeking to increase our already very satisfactory level of growth. With Transportation & Global Finance, we are providing services that are in high demand in the corporate client business sector. In our institutional business, we are seeking to strengthen our global custody and private label fund business, headquartered in Luxembourg.
What role does cooperation with private banking play in this context?
I am confident that working with private banking, we can take much better advantage of the potential of One Bank. Few of our competitors offer a full range of products and services, as we do. Along with Private & Wealth Management Clients and Premium Clients, we want to distinguish ourselves as a "bank for entrepreneurs" in Switzerland. Our common goal is to support our clients, as entrepreneurs and private individuals, throughout the life cycle – from the founding of a company, through the development stage, and on to the choice of a successor. The UHNWI segment is another key growth area for Credit Suisse. Here we are working with WMC, in Switzerland as well as internationally, to promote lending, transportation, corporate finance, global custody, and our private label fund business.
DPB has become a familiar acronym. What is the situation with DCB, digital corporate banking?
A critical look reveals that we have made less progress in this area than we would like. Together with colleagues from DPB and IT, we have therefore been examining this issue and setting certain priorities. The first step is to concentrate on businesses that are broad-based and process-intensive, and that involve numerous repetitive processes. Here the goal is automation, for example in the area of client onboarding. We plan to transfer some of the activities that we are still handling ourselves to a self-service and self-admin area. This lessens the burden on us, and numerous clients have requested this as well.
But that would still be traditional one-way online banking.
That's correct. Our first focus is on areas where we can clearly simplify matters for our clients and the front office, and on areas that offer concrete advantages. We will also take a look at more innovative topics. For example, portals are playing a more important role; a pilot project is currently under way using our Corporate Cash Manager, which enables SME clients to handle cash management independently, and this can also generate additional income for us.
Since the SNB eliminated the minimum euro-franc exchange rate, export-oriented companies are suffering the consequences of a strong franc. What are you doing to help?
This is a challenging time for many Swiss companies. When I assumed my new function in the spring, I was pleasantly surprised at how positive they still were. Since then, however, many have become less optimistic. The situation is affecting not only export-oriented companies with direct exposure to the euro, but also the many suppliers located in Switzerland. Indeed, they are often the ones who face the most problems. How can we support them? By helping them to be as efficient as possible in financial matters, and by offering support in the form of cash management, credit, leasing, and factoring. And currency management – which many SMEs have long neglected – is again an important concern, of course. These are defensive measures. But many companies are also going on the offensive, and instead of simply suffering in silence, they are diversifying their business abroad or opening up new markets. We are supporting them in connection with acquisitions or partial sales, as well as assisting them in their foreign business dealings by providing trade financing and other services. This is a great opportunity for us to demonstrate that we are a reliable partner.
Negative interest rates and a reduced balance sheet pose difficult challenges. What solutions do you have for dealing with these issues?
In the case of negative interest rates, we have made targeted price adjustments – consistently, but in a way that does not jeopardize our partnership with clients. In the future, we must – and we will – make more efficient use of our balance sheet. We will clearly identify the businesses we intend to maintain as well as those we plan to give up. However, this is not so much a matter of eliminating entire business lines, but rather of improving or, if need be, terminating unprofitable client relationships. The bottom line is this: We are working with our clients to cultivate primary-bank relationships at prices that are in keeping with our advisory services and solutions. In addition, we are removing additional business areas from our balance sheet but retaining the client relationship. Just recently, in June, we concluded a substantial deal of this kind, and others are currently under consideration.
What are your priorities for 2016?
They involve five areas. First, we want to grow, in Switzerland and internationally, within the One Bank structure. Second, we want to become more efficient with the help of DCB, process improvements, and the Credit Suisse centers of competence. Third, we want to make more effective use of our balance sheet, to the benefit of profitable businesses and client relationships. Fourth, we need to protect our profitability, which also means adjusting prices. Fifth, we want to be the employer of choice for our employees, present and future.
What book is currently on your nightstand?
"1812: Napoleon's Fatal March on Moscow" by Adam Zamoyski. I'm fascinated by history and enjoy reading about it – about the ancient Romans, about the Enlightenment, from American independence to the French Revolution, and about the eventful first half of the 20th century. I enjoy reading several books at the same time, in many cases when everyone at home is already asleep. Right now, for example, I'm finishing "The Sense of an Ending" by Julian Barnes.