There are more headwinds for Credit Suisse, this time with the reported postponement of plans to launch a locally incorporated bank in mainland China.

Credit Suisse will delay the target launch of its onshore bank in China by one year to 2024, according to a «Bloomberg» report citing unnamed sources, marking the second postponement since the project was established two years ago.

In addition to a slow-moving licensing process, Zurich-based senior executives also questioned the need to invest in the Chinese project amidst lockdowns and private enterprise crackdowns that are slowing growth and hurting deal-making, the report said.

Credit Suisse’s onshore China business has seen a number of key departures in recent times, most notably the relocation Tim Tu – ex-CEO of the mainland securities joint venture – to Hong Kong to become the co-head of the APAC financing group.

Securities License

According to the report, Credit Suisse has struggled to expand its existing joint venture due to regulatory hurdles in licensing. 

The local securities regulator has not yet made an on-site inspection – the final step required before a wealth management build-out and securities venture expansion beyond Shenzhen into other cities is allowed – after Credit Suisse gained control in 2020.

Hiring Slowdown

After adding more than 200 workers in mainland China last year, Credit Suisse will slow hiring this year partly due to the license delay, the report said.

Rules on contract renewals will allow the bank to reduce a «few dozen» jobs in the next 12 months which will mostly involve mid to back-end support and IT functions.

Last year, Credit Suisse said it planned to triple its headcount in China over the next few years.  

More Pain

The latest news of expected slower expansion in China follows more negative headlines including the prospects of job cuts across divisions and geographies as well as a warning of a second-quarter loss.

And in the latest, there are reports of a possible takeover bid in the coming days by U.S. custodian giant State Street. 

«Credit Suisse is committed to China as a strategic market in our overall regional APAC footprint, and there is a clear mandate to remain on track with the continued build-out of our onshore franchise across wealth management, investment banking and asset management, as the Chinese regulatory and market opportunities allow,» a spokesperson for Credit Suisse said.

«As part of our strategy, we continue to invest in our China footprint including our immediate focus of taking full ownership of our securities joint venture, as we have stated previously.»