Credit Suisse exits onshore private banking for Russia's rich

Credit Suisse exits onshore private banking for Russia's rich
Credit Suisse's Lucerne branch.
By Jason Corcoran in Moscow July 12, 2016

Credit Suisse, Switzerland's second-largest lender, is shuttering its onshore private bank for Russia's super-rich.

The move by Credit Suisse follows the decision by its Swiss banking rival UBS to close its wealth management presence in Moscow a year ago. Clients will now have to travel to Switzerland to put money on account with the lender. 

"Credit Suisse has revised its private banking offering in Russia and will continue providing advisory services for private banking customers in Russia but without onshore booking," the Zurich-based lender said in a statement.

Forbes Russia edition reported that the decision was made in late May and clients were informed about it in June. "A full-fledged private banking platform in Russia for a global bank is like driving a Rolls-Royce through the jungle," Forbes quoted an unidentified Credit Suisse source as saying.

Credit Suisse, which parted company with its long-standing Russian CEO Steven Hellman in February, has been down-sizing its operation in Moscow for a number of years.

The lender, which shifted its Russian investment bank to London in 2012, is down to a skeleton staff in Moscow and many banking insiders believe they could be the next to fold, along with Bank of America Merrill Lynch. 

Deutsche Bank closed its Moscow investment bank and its own wealth management operation in September after a trading scandal allegedly involving $10bn worth of suspect transactions. US bank Jefferies, Britain's Barclays and Royal Bank of Scotland followed suit after sanctions and a collapse in commodity prices effectively froze capital market activity.  

The Swiss bank's decision to stop booking onshore money in Moscow comes amid a probe into the activities of an ex-wealth manager, who admitted last year that he carried out trades without the knowledge of customers, who included the billionaire former Georgian prime minister Bidzina Ivanishvili. The banker, Patrice Lescaudron, is said to have managed a portfolio of $1.6bn for clients in Russia and the former Soviet Union.

Credit Suisse said in March that the banker, who worked in Moscow but was based in Geneva at the time of his January arrest, was a lone wolf who "concealed his deceptions from colleagues and that this is to the best of our knowledge an individual case".

Credit Suisse is one of the first international banks to offer onshore private banking services in Russia back in 2006. Its first head of private banking in Moscow, Alexis Rodzianko, has long since left banking and now runs the American Chamber of Commerce in Moscow.

The Knight Frank Wealth Report released in March showed that the number of ultra high-net worth individuals from Russia slumped by 5%. Political pressure, as well as the economic slump, has promted many wealthy Russians to diversify more money away from home – despite a drive by President Vladimir Putin to bring wealth back onshore. 

Moscow is still served by a small number of Swiss private baning boutiques such as Julius Baer and Lombard Odier, while Russian state-banks like Sberbank and VTB have been cutting back on their wealth-management services due to lack of demand.

News

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss