Credit Suisse Group AG, Switzerland’s second-largest bank, is closing its Taipei branch as it tries to cut fixed income and overseas operations in a bid to reshape its business strategy, the Financial Supervisory Commission said yesterday.
The downsizing plan, yet to be formally lodged, will eliminate 20 jobs here and move the remaining 10 to its Hong Kong office, Banking Bureau Director-General Kuei Hsien-nung (桂先農) told a media briefing.
The downsizing decision came after the group announced earlier this month it would cut about 1,500 more staff globally and reorganize its securities unit after reporting weak third-quarter net profits of 683 million Swiss francs (US$785 million).
“The global financial crisis of 2008 and the ongoing European debt crisis call for the reorganization” after seeing its investment banking business hurt, Kuei said.
The planned closure would have very limited impact on the local banking sector, given its modest presence here, he said.
Credit Suisse’s Taipei branch, set up in 2009, does not provide offshore banking or lending services or sell structured notes on behalf of its European headquarters, Kuei said, adding that Credit Suisse would retain its securities division and research team in Taipei.
The pullout still needs regulatory approval and the commission indicated it would give it the go-ahead.
“Taiwan is a democratic country,” Kuei said. “They [foreign banks] are free to come and free to go.”
Credit Suisse’s planned exit from the local market will reduce the number of foreign banks in Taiwan from 28 to 27, Kuei said.
The Swiss bank set up a representative office in Taipei in 1998.
Financial-industry job losses worldwide are approaching 200,000 this year as Credit Suisse and competitors like Citigroup Inc race to reduce costs while trying to cope with shrinking revenue and demands from regulators that they hold more capital.
Credit Suisse is exiting the business of commercial -mortgage-backed securities origination and will scale down long-dated unsecured trades in global rates, emerging markets and commodities businesses.
It will also shrink its advisory businesses to reduce overlaps in covering certain countries, industries and products, the bank said on Nov. 1.
Credit Suisse does not have onshore private-banking operations here, Kuei said.
Credit Suisse, which previously aimed to reduce risk-weighted assets by SF70 billion to prepare for Basel III, said later it would cut them at the fixed--income unit by SF99 billion by the end of 2014.
That should improve the return on equity at the bank, which would have slumped by 9 percentage points without any measures.
In related news, the commission has approved Taiwan Business Bank’s (臺灣企銀) application to invest 500 million yuan (US$78.73 million) to set up a branch in Shanghai, the Taiwanese lender said in a exchange statement yesterday.
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