Taiwanese invested about NT$1.81 billion (US$59.6 million) in Credit Suisse AG’s subordinated Additional Tier 1 bonds, mostly via wealth management services provided by local banks, the Financial Supervisory Commission (FSC) said on Thursday.
A total of 77 clients among five local banks’ wealth management businesses had invested NT$1.6 billion in the AT1 bonds, while 103 professional investors had a combined investment of NT$210 million in the bonds via the sub-brokerage services of six securities companies, the commission said.
Meanwhile, 37 offshore funds have a combined investment of NT$2.33 billion linked with the AT1 bonds, the commission added.
Swiss financial regulator Finma has said it would write down the AT1 bonds as part of its Credit Suisse rescue deal, making the bonds worthless, with enraged bondholders pledging to sue the Swiss government and the regulator.
“It will be local banks’ decision whether they ask for compensation on behalf of their clients,” Banking Bureau Deputy Director-General Lin Chih-chi (林志吉) told a news conference in New Taipei City on Thursday.
“On the other hand, we will also understand whether the banks have made errors when selling the bonds to local investors,” Lin said, adding that the commission had not received complaints from investors.
There is no grounds to wipe out the AT1 bonds, as the Swiss government had said that Credit Suisse’s capital adequacy and liquidity met their requirements, Cathay Financial Holding Co (國泰金控) president Lee Chang-ken (李長庚) said on Wednesday.
Lee urged investors to take action and seek compensation.
The financial sector had a combined exposure of NT$155.6 billion to Credit Suisse as of the end of last month — local banks with NT$46.1 billion, insurers with NT$109.3 billion and securities companies with NT$197 million, the commission said.
The exposure should not have a significant impact on local financial companies, as it makes up a fraction of the companies’ investment portfolios, it said, adding that the three sectors did not have direct investments in the AT1 bonds.
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