The Swiss bank reportedly went «one-bank» on Evergrande as well as its billionaire chairman, while UBS is shouldering bond exposure. 

Zurich-based Credit Suisse went from hot to cold on the now embattled property developer at the center of an economic maelstrom, the «Financial Times» (behind paywall) reported on Friday. 

Crucially, both the Swiss lender's wealth managers as well as the investment bankers were sniffing around the Shenzhen-based firm for business, the outlet reported. 

Ultra-Wealthy Client

There is little question why: Evergrande Chairman Hui Ka Yuan took $8 billion in cash dividends out of Evergrande since the property firm's 2009 stock listing, «Forbes» calculated on Thursday.

This would mint him and the firm precisely the type of ultra-wealthy client that Credit Suisse's private bankers, as well as capital markets arm, would be hunting.

Hitting The Brakes

Unlike other recent, prominent examples, Credit Suisse appears to have hit the brakes in time to prevent another massive financial blow. Crosstown rival UBS didn't pull back in time: its clients are sitting on losses on Evergrande bonds, the outlet reported.

Credit Suisse went from being the company's biggest bond issuer outside of China over the past decade to no longer underwriting any debt products due to concerns about its financial state, the pink paper reported.

On Thursday, the bank said it has no lending exposure to the debt-laden firm, but that its asset management arm maintains minor investments.

Circular Loan?

In 2018, Hui asked Credit Suisse's private bankers for a loan against collateral linked to Evergrande. He was subsequently turned down by senior management, according to the «FT», because it bore the hallmarks of circular financing. A spokeswoman for Credit Suisse didn't comment on Hui.

From then on, Credit Suisse's investment bankers also begun seeking distance to Evergrande, the outlet reported, though Hui appears to have remained with its wealth management arm as a client.

The Chinese firm and Hui are the latest examples of the «one-bank»-style of business that Credit Suisse has cultivated – sometimes with disastrous consequences.

Political Hot Potato

To be sure, the Swiss bank wasn't the only bond-runner for Evergrande: the outlet reports that UBS and BNP Paribas also issued debt for the company.

Evergrande, which grew out of the trend of mass urbanization in China, missed a key U.S. dollar bond payment on Thursday and has become a political hot potato for Beijing.

Facing Losses

UBS as well as HSBC and BlackRock face losses according to the paper because they added to Evergrande holdings shortly before prices on the bonds collapsed. 

Ralph Hamers, CEO of UBS, said on Thursday he is resting easy about the Swiss wealth manager's exposure to Evergrande, noting that it has called some margin over the issue – it isn't clear of whom – and that this had been «executed well».

A spokesman for UBS reiterated that Hamers had called its exposure to the issue «immaterial».