Credit Suisse cuts 20pc India wealth management staff: Sources

MUMBAI: Swiss bank Credit Suisse is reducing about 20 percent of its staff in the India wealth management unit as part of its global headcount reduction plans amid tough market conditions, two sources with knowledge of the situation said on Friday.

Out of about 60 people in Credit Suisse's India wealth management unit, 12 are leaving the firm, the sources said, adding Puneet Matta, head of the business unit, left the bank about a week back.

The sources declined to be named as the matter was not public yet.

"Credit Suisse remains fully committed to the Indian market. We continue to be proactive about monitoring the size of our business relative to efficiencies and market conditions," said Mihir Doshi, CEO of Credit Suisse in India.

"This involves realigning resources and adjusting capacity to meet client needs and to manage costs across the business," he said in a statement, without giving further details.

Switzerland's second-biggest bank said last month it was cutting about 2,000 jobs globally after weak trading activity and the strong Swiss franc hit second-quarter results.

Investment banks worldwide have been hit by slow trading due to the debt problems in the euro zone and United States, as well as regulations aimed at forcing banks to hold more capital to protect them from future shocks after the 2008 global financial crisis.

Credit Suisse is reshuffling its global private banking division, according to an internal memo seen by Reuters on Thursday, the first move by the unit's new head.

The bank which has interests in investment banking asset management and equity research in India employs more than 1,200 people in Asia's third-largest economy and started the wealth management business in India in May 2008.

The sources said the bank had decided to reduce the headcount in the wealth management unit in view of the "challenging business environment" but the bank was highly unlikely to exit from the business in India completely.

In India's private banking sector, a host of global banks including Bank of America Merrill Lynch, Standard Chartered and Credit Suisse compete with wealth management arms of local banks and boutique firms.

The intense competition has resulted in surging costs, talent crunch and wafer-thin margins for the banks, which are attracted by the growing number of millionaires in a fast growing economy.

In 2010, the number of high net worth individuals, who have more than $1 million in invest-able surplus, rose 21 percent in India to 153,000 making it the 12 largest globally ahead of Spain, according to a Capgemini and Merrill Lynch report.

Copyright Reuters, 2011