Zurich-based Credit Suisse will reportedly abort plans to set up an onshore bank in mainland China to avoid potential regulatory conflicts caused by the merger with UBS.
Credit Suisse has scrapped plans to establish a locally incorporated bank in mainland China, according to a «Reuters» report citing unnamed sources.
The Swiss lender had made plans in recent years to set up a wholly-owned bank to offer a full range of wealth management services to onshore clients in mainland China.
Regulatory Issues
The decision to abort plans is due to potential regulatory conflicts caused by the merger with UBS following the government-brokered rescue.
According to Chinese regulations, a financial entity in the country can only apply for one license to have a locally incorporated bank and also receive only one such license.
Banking aside, UBS and Credit Suisse could also face similar issues in their onshore funds business as local regulations only allow stakes in two asset management companies. The Swiss banks currently have stakes in one such firm each with UBS reportedly planning for another license to operate its own fund unit, though it is expected to abandon such efforts to proceed with its integration with Credit Suisse.
