Credit Suisse Group AG told staff its wealth assets are operationally separate from UBS Group AG for now, but once merged, clients might want to consider moving some assets to another bank if concentration was a concern, an internal memo on Sunday said.
The memo provided talking points to Credit Suisse staff for client conversations after a historic Swiss-backed acquisition of the troubled bank by UBS.
“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.
Photo: Pascal Mora, Bloomberg
That response was suggested to Credit Suisse staff if they were asked by clients what they should do if they were also a UBS client and wanted to avoid asset concentration, which can be a concern for wealthy customers.
In a package orchestrated by Swiss regulators on Sunday, UBS is to pay US$3.25 billion for 167-year-old Credit Suisse and assume up to US$5.4 billion in losses.
The deal makes UBS the undisputed global leader in managing money for wealthy clients through the takeover of its main rival, triggering some concerns about concentration risks for clients.
The memo also told staff to inform clients that plans for its investment banking business are to be communicated in due as the deal continues to be worked out.
“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.
Credit Suisse is proceeding with its annual Asia Investment Conference in Hong Kong tomorrow, the spokesperson said, adding that the event would be closed to media.
A separate memo on Sunday said the bank told employees that its operations were unaffected after it agreed to 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.
A number of major banks including Societe Generale SA and Deutsche Bank AG are restricting new trades involving Credit Suisse or its securities, sources said.
Regarding counterparties having stopped business with Credit Suisse, the bank said in the client talking-points memo that it believes the transaction “will help to restore confidence to the financial markets more broadly.”
Market players remain concerned about the next moves at Credit Suisse and the impact on employees, investors and clients.
Credit Suisse told staff that promised bonuses and pay increases would be paid as the bank seeks to keep “business as usual.”
The lender said that it would cautiously identify which roles might be affected, and “will aim to continue to provide severance in line with market practice.”
“The merger is expected to close by the end of 2023 and until such time we will continue to operate as close as possible to ‘business as usual,’ focused on serving our clients,” Credit Suisse said.
Additional reporting by Bloomberg
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