Credit Suisse is giving up its onshore private bank in Russia. Once considered a promising new market for the wealthy, the country is apparently not delivering the revenue to justify costs for running the unit.
According to the Russian edition of U.S. magazine «Forbes,» Credit Suisse decided in May to stop offering private banking services out of Russia and has been quietly informing clients since last month.
A spokeswoman for Credit Suisse confirmed to finews.ch that the bank will no longer offer onshore booking services in Russia, which has been hit by U.S. sanctions and by a sharp fall in commodities prices.
«Russian Art Basel»
«Credit Suisse constantly reviews its international businesses and product offerings to ensure it is operating in the most efficient way to provide clients the services they require. As part of such a review, 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 bank said.
Credit Suisse's commitment to the Russian private banking market was underscored as a strategic partner for Cosmoscow, an international art fair touted as Russia's answer to Art Basel. The bank has also been a general sponsor of the Bolshoi Theater since 2007.
The Swiss bank's cuts to its Russian private bank were preceded by the sudden departure in February of Russia head Steven Hellman.
1990s Russian Crisis Hit
Credit Suisse has a long history in Russia: it was one of the most influential foreign investment banks in the country in the 1990s when it maintained an expansive investment banking presence as the country initially opened up.
The Russian crisis beginning in 1998 caused a major financial hit to the Swiss bank, but it later retrenched, tasking prominent J.P. Morgan banker Fawzi Kyriakos-Saad with the region in 2006.
Investment Bank Opens the Door
Like many banks, Credit Suisse used its entree as an investment bank to try and win private bank business too. Though both Switzerland and the U.K. are beloved offshore markets for Russians, bankers had assumed domestic demand as well.
That apparently hasn't panned out, with Russians happy to bank their assets outside of their home country, according to several sources.
«Credit Suisse will retain its banking license and will continue to offer onshore banking services to its international and local institutional, corporate and financial clients through the investment bank,» the bank said.
Mirrors Rivals
The bank had in 2012 already shifted large parts of its Moscow investment banking operation to London in a bid to cut costs. UBS also doesn't book onshore in Russia.
Credit Suisse's withdrawal mirrors that of Deutsche Bank, which last fall said it would let go as many as 200 people by shutting down its investment banking activities in Russia. Barclays has also sharply pared back its capital market activities in the country.
