Credit Suisse (
) wealth management accounts for about 47% of the
$46.25 price estimate for Credit Suisse
, which is slightly ahead of the current market price. The wealth
management division of CS competes with of other banks like
), UBS (
) and Goldman Sachs (
The total Assets Under Management (AUM) for the wealth management
division of Credit Suisse was $840 billion compared to $1.3
trillion in 2009 for UBS and $1.5 trillion for Morgan Stanley.
The Wealth Management division for CS is divided into three main
regions, based on assets managed for clients in those regions.
These are the international clients, Swiss and corporate clients.
We recently discussed the upside from improving profit margins in
CS Wealth Management in one of our articles:
Credit Suisse Could Find Upside in Restored Wealth
Management Profit Margins
The asset management division provides retail investors with a
full range of mutual fund and alternative investment products,
and institutional clients with a fully integrated asset
management offering. On the other hand, wealth management serves
the needs of high net-worth individuals as well as institutional
investors with full range of financial services.
Wealth Management Competitors
The above bar chart compares the change in wealth management
assets for UBS, Credit Suisse and Morgan Stanley between 2006 and
3Q 2010. Though strong global economic growth fueled an increase
in the assets managed by these firms in 2007, they saw a
significant decline in their assets managed in 2008 due to the
global financial crisis. However, with global economic
environment improving, these firms have increased their assets
managed largely due to an increase in risk appetite and
investment activity by clients and as a consequence of returns
across most major asset classes improving. Morgan Stanley in
particular has been scaling up its wealth management operations,
expanding its business significantly and entered into a joint
venture with Citi's Smith Barney, which should help growth this
We estimate that the international clients segment was the
most valuable at around 29% to its stock price estimate with
Swiss clients and Institutional clients contributing nearly 10%
and 8% respectively.
Profit Margins for Wealth Management
The Wealth Management international operating margin decreased
from an estimated 48% in 2006 to 26% in 2008 due to the financial
crisis. However, with the economic environment getting slightly
better we expect this to recover to 31% in 2012. By the end of
the Trefis forecast period, we expect this to reach around 45%.
You can modify the chart below to make your own forecast.