Credit Suisse is pulling out of private banking in Panama. The bank says its decision had nothing to do with the «Panama Papers», in which it featured prominently.
The decision to close private banking in Panama is final. Credit Suisse (CS) confirmed U.S. reports about the closure when contacted by finews.asia on Tuesday. A CS spokesperson said the bank's decision was based on cost and efficiency calculations and had nothing to do with the «Panama Papers».
CS was one of ten banks with the most offshore constructions – almost 1,000 – held for customers in its books, according to the leaked documents of belonging to Mossack Fonseca, the law firm based in Panama.
Decline of Assets Under Management
CS has a staff of 20 in private banking in Panama. Customers sometimes were managed by the Panama branch, but most of them banked via the Swiss platform. Having a branch in Panama thus made little sense, not least because the bank also pulled out of private banking in the U.S. last year.
Assets under management in Panama last year declined by 40 percent, with little hope for an improvement soon.
No Signal for Latin American Business in General
The customers of CS Panama will receive the same services from the Swiss units of the bank, it said in a statement. Its decision to shutter Panama won't affect the other branches in Latin America, it added.
Credit Suisse has a strong presence in Brazil and recently invested in Mexico. It added a dozen new customer advisers in the Latin American nation recently, taking them from Swiss rival UBS.
Offshore Activities
The closure of the Panama branch thus has to be seen in the context of a cleaning up of the bank's offshore activities, and not as part of a strategic regional reorientation. After all, Panama was a classic place for offshore banking, in particular for U.S. customers, who placed their money there for tax purposes.
Fatca and the decision by the country to adopt OECD standards changed this. But Panama remains a popular place for offshore companies, in part because of legislation allowing anonymous company ownership.
CS had offered rich clients offshore accounts in Panama. Credit Suisse Channel Islands was responsible for the service; the business wasn't illegal. CEO Tidjane Thiam hastened to ensure the public after the publication of the papers that customers held only tax assets in offshore accounts opened by CS in Panama. U.S. authorities currently are investigating the truth behind the claims.
