Several large clients of the private bank would withdraw assets, including wealthy families from Asia and the Middle East.
Several wealthy families in Asia as well as the Middle East are withdrawing ‘hundreds of millions of dollars’ due to the health of the struggling Swiss lender, with rival corporate bankers apparently taking advantage of concerns, according to a ‘Bloomberg’ report which cite anonymous sources.
The report said some customers in Singapore and the Middle East had made cash withdrawal or asset transfer requests of tens of millions of dollars or more. An Asian family office that withdrew money said the bank told it there was a backlog of unprocessed transactions that had caused temporary backlogs.
Trying to reassure, private bankers at Credit Suisse thwarted apparent efforts underway at competitors by proposing that assets be transferred to third-party trustees. They also recommended that clients invest in short-term US Treasuries which limit exposure.
Credit Suisse faces a myriad of challenges, including high-profile questions over how it will finance a long-awaited restructuring of its investment bank, a step that is expected to be announced in late October with the release of third quarter results. trimester.
The bank’s balance sheet came under scrutiny early last week after its credit default swap spreads hit 355 basis points. Credit Suisse then bought back $3 billion of its own debt on Friday, likely alleviating some of those worries.
Assets under management (AuM) have declined this year at the Swiss bank given the pressure it faces. As of June 30, assets under management recorded in the wealth management sector totaled 662 billion francs (665 billion dollars), down 6.4% compared to the first quarter and 14% less than a year earlier.