According to an internal document, Credit Suisse advised staff that while its wealth assets are now operationally independent of UBS, clients may wish to think about shifting some assets to another bank if concentration turns out to be an issue once the two banks merge.
The letter, which was reviewed by Reuters- dated Sunday, provided talking points to Credit Suisse (CSGN.S) employees for client interactions following a historic Swiss-backed takeover of the struggling bank by UBS Group. (UBSG.S).
“For now, assets are still legally separated. Once that changes, you (clients) may of course want to consider moving some of your assets to another bank if concentration is a concern,” the memo said.
If Credit Suisse employees get asked by clients what they ought to do if they were also UBS clients wishing to avoid an excessive amount of asset concentration, which can be a worry for wealthy clients, they were advised to respond in that way.
In a deal arranged on Sunday by Swiss regulators, UBS will pay $3.23 billion to buy the 167-year-old Credit Suisse and take on up to $5.4 billion in damages.
By acquiring its primary rival, UBS will become the undisputed global leader in managing money for the wealthy, raising some worries about customer concentration hazards.
As the specifics of its acquisition by UBS were still being worked out, Credit Suisse also instructed personnel to let clients know that plans for its investment banking division would be announced in due time, according to the memo.
“We do not expect there to be any disruption to client services. We are fully focused on ensuring a smooth transition and seamless experience for our valued clients and customers,” a Credit Suisse spokesperson said.
The spokeswoman added that Credit Suisse would still be holding its annual Asia Investment Conference in Hong Kong, which would begin on Tuesday, but that the event would no longer be open to the media.
The bank informed staff in a different memo on Sunday that its regular business operations had not changed as a result of its approval of the UBS takeover.
“Our branches and our global offices will remain open, and all colleagues are expected to and should continue to come to work,” Credit Suisse said in the memo sent globally and seen by Reuters.
A number of large banks, including Societe Generale SA (SOGN.PA) and Deutsche Bank AG (DBKGn.DE), were reportedly blocking new trades involving Credit Suisse or its assets on Friday, according to Reuters, which cited sources.
Credit Suisse stated in the client talking points memo that it thought the acquisition “will help to restore confidence to the financial markets more broadly” in reference to counterparties who had ceased doing business with it.
Market participants are still worried about what Credit Suisse will do next and how it would affect the company’s employees, clients, and investors.
At a press conference, UBS Chairman Colm Kelleher announced that the investment bank of Credit Suisse, which employs thousands of people globally, would be shut down. By 2027, $7 billion in cost reductions per year are anticipated, according to UBS.
- Published By Team Hongkong Journalist