In his first interview since the Swiss bank published its quarterly results on July 28, showing that his division had generated a pre-tax profit of Sfr135 million after two loss-making quarters, New York-based Amine tells FN what keeps him up at night, how he measures success and why London remains important post-Brexit.
Financial News: What is the biggest concern for you at the moment?
Jim Amine: It’s a combination of the potential impact of Brexit, the upcoming elections in the US and uncertainty around the global economic outlook. All of these issues concern me to the extent that they impact issuer confidence and the number of transactions companies do, as well as investor risk appetite.
What’s on your to-do list in reaction to these concerns?
Managing our expense base very carefully, reviewing our investment plans to make sure they are still appropriate, and, most importantly, staying close to our clients. We are in constant dialogue with our clients to understand their concerns and discuss how different markets might impact their strategic and financing needs. Our clients [are] concerned about how to navigate market uncertainty right now so we need to ensure we are making an extra effort to communicate with them.
Is there any opportunity in all of this?
There are a couple of areas. Non-investment-grade debt, where demand has gone up as yields in Europe and in the US have gone down. That market could be more robust on the back of market conditions. Another area is M&A, where we could see inbound M&A into Europe pick up.
You’ve previously said that the bank is not introducing a hiring freeze on the back of Brexit. Is that still the case?
Yes, that’s still the case. But we are looking hard at the impact of Brexit so far on the markets.
Are you still hiring in Europe?
Yes, very selectively.
What are your chief concerns around Brexit?
We are obviously looking closely at passporting issues but it’s still early days. The near-term work we are doing is around the impact on the economies as well as client activity in Emea [Europe, the Middle East and Africa]. However, Credit Suisse remains committed to our long-standing presence in London.
Credit Suisse’s earnings came out on July 28. But how do you measure success internally?
Several different ways, and to be fair we’ve been very consistent since October last year when we came out with our new strategy. One ambition was to grow our M&A and ECM franchises – and we’re seeing that come through. We also said we wanted to maintain our leading position in leveraged finance where we were number four in the Americas [in the first half] and with our target client segments, especially investment-grade corporates.
ECM was flagged in October as an area to focus on growth, but activity and revenues in this area have been impacted severely by volatility this year. Has that strategy since changed, and will it?
The ability to grow the top line in ECM is challenging in the context of current markets, but we look more at our share of wallet than just revenues. Our overall share in ECM has grown in the first half of 2016 versus the same period last year, with particular strength in what was the most active part of the market – follow-ons. We think we are properly resourced in ECM, and well-positioned for when markets pick up, potentially in September of this year. Historically, the deeper ECM market has been in the US, and we would expect the market to pick up there first.
Where does the bank most need to improve?
I’d like to sustain the quarter we had, particularly in light of market conditions. July Street fees are down from June, so near-term it’s a tougher environment, but the deal pipeline across the Street is relatively healthy.