Breakingviews – Rivals can feast on Credit Suisse client spoils – Reuters

Breakingviews – Rivals can feast on Credit Suisse client spoils – Reuters

ZURICH, April 17 (Reuters Breakingviews) - Rivals are queueing up for a slice of UBS’s (UBSG.S) enlarged wealth management pie. A government-sponsored takeover of Credit Suisse (CSGN.S) should on paper allow Switzerland’s largest lender to boost its rich clients’ asset pot to a staggering $3.4 trillion. But new boss Sergio Ermotti should plan for a significantly smaller amount.

Credit Suisse saw 110 billion Swiss francs flying out the door in the final quarter of 2022. That was 8% of its assets under management. But a similar amount may have evaporated in the run up to the March 19 emergency rescue, Vontobel analyst Andreas Venditti estimates.

These outflows were chiefly cash from wealthy clients and some deposits at Credit Suisse's Swiss bank unit. A chunk went to local cantonal banks, which enjoy a state guarantee for all customer deposits, above the 100,000 Swiss franc limit for domestic bank accounts. Zürcher Kantonalbank, the largest of such lenders, reported 34 billion Swiss francs of net new inflows in 2022, up 31% from the previous year. Some hot money also went to foreign competitors of Credit Suisse, especially in Singapore and Dubai, Reuters Breakingviews learned from conversations with nearly a dozen senior private bankers.