Credit Suisse at critical moment

[Martin Everson]

It's expensive, has high min deposit, high fees, they do a colonoscopy when you want to open account... sounds like their entire competitive advantage was laundering money for criminals and now that they are forced to stop doing that (allegedly), the bank has no raison d'etre.

You hit the nail on the head. Now CS is forced to do clean business they are suffering. They are not competitive, credible or competent over peers. The end of banking despots, criminals, market manipulation, deceiving customers etc may be affecting their business model adversely. Criminal Services also known as CS or its new entity CSFB (Criminal Services For Billionaires) has an uphill battle in any case.


Summary of CS major fines ($12bn) over last 10 years

https://www.srf.ch/news/wirtschaft/credit-suisse-unter-druck-die-bussen-sammlerin
(You need to translate to English)

 

[Martin Everson]

Credit Suisse slumps after flagging $1.6 billion loss​

https://finance.yahoo.com/news/credit-suisse-slumps-flagging-1-060838674.html
--- quote start

The world's high net worth individuals, have pulled 10% of all the assets under management at the bank's key wealth management division since the start of October, something that will cause a sharp drop in fees at the unit around which Chief Executive Ulrich Koerner hopes to rebuild the bank.

The bank said outflows had slowed "substantially" from the first two weeks of October but "have not yet reversed."

Its domestic division had also experienced a moderate withdrawal of around 1% of net assets, but that pales in comparison to the far more troubling developments in Wealth Management, which had echoes of the 2008 financial crisis when investors feared for the safety of their assets.

The bank noted that it had been forced to dip into its liquidity reserves, briefly taking it below certain minimum thresholds demanded by its regulators. However, it stressed that its liquidity coverage ratio and net stable funding ratio - the two main yardsticks introduced by global regulators after 2008 to stop a repeat of Lehman Brothers' collapse - were maintained at all times.

--- quote end


When a private bank suffers a run and loses 10% of AUM that's a big problem indeed for a wealth manager like CS...lol. Not only do you lose fees but you have to incentivize other clients not to follow - meaning you drop fees.

 

[FinTech Avenger]

I recall once having contact with one guy from Trinidad and Tobago (FATF-blacklisted) jurisdiction who posed as investment advisor with some local regulation, turned to be Ponzi-scheme runner.

He told me that his CSP/lawyer made applications to several Swiss banks with his 1 mil + wealth of unclear origins. Swissquote declined him, Dukascopy declined him, even CIM Bank said "no".

But guess what?

He was happily accepted by Credit Suisse

 

[Martin Everson]

Credit Suisse Offers Higher Rates to Rebuild Depleted Assets​

https://www.yahoo.com/now/credit-suisse-offers-higher-rates-061238351.html
----- quote start

Credit Suisse Group AG bankers are trying to entice rich clients with higher-yield notes and bonus deposit rates in a bid to quickly recoup as much as possible of the almost $90 billion recently pulled from the bank.

The head of the Swiss lender’s wealth unit, Francesco de Ferrari, is mobilizing his 1,800 relationship managers in a mass calling campaign with offers including a lowered threshold on balances entitled to an interest rate of 5% to 6%, according to people familiar with the matter, who asked not to be identified as the plans are private. In addition, the bank is offering notes that pay a fixed rate of close to 7% to compensate investors for lending their cash for a number of months, the people said.

*****

Some desks have been restricted from making new loans to fund clients’ leveraged investments until the next quarter due to a lower level of liquidity, the people said. Those teams are being told that new loans cannot be made until the client has brought back assets, paid off old loans, or promised to do new business with the bank, they added.

---- quote end

Damn this bank is desperate. If I got a call from a Credit Suisse relationship manager I would pull all my money out the same day....smells of desperation. Why take even a 1% risk when UBS is across the road . The bank is also still under investigation by US.... You never want to be last out the door.

Credit Suisse Faces US Tax Probe, Senate Inquiry Over Accounts​

https://news.yahoo.com/credit-suisse-faces-us-tax-160456442.html

 

[JohnnyDoe]

Why take even a 1% risk when UBS is across the road .​

because CS is too big to fail

 

[Martin Everson]

because CS is too big to fail

Lol..them days are long gone. Clearly $90bn withdrawal of clients assets shows confidence is not so high . Also importantly a lot has changed in Swiss banking world since UBS being bailed out during 2008 crisis with new bail-in rules etc coming into play to prevent government bailouts ever being needed again. I would not want to see today what FINMA's restructuring plan is for banks of "systematic importance". The smart money just moves to another bank and asks questions later.

You can read more about is below without me having to explain it all.

https://pestalozzilaw.com/en/insigh...restructuring-procedure-and-bail-switzerland/

 

[GeneralGogol]

the bank is offering notes that pay a fixed rate of close to 7% to compensate investors for lending their cash for a number of months

Somehow this feels more desperate than KuCoin offering 150% APY on BTC

 

[Martin Everson]

Future of Credit Suisse in question after scandal-plagued bank just lost its most loyal investor​

https://finance.yahoo.com/news/future-credit-suisse-scandal-plagued-131448415.html

 

[RealDude]

Credit Suisse shares hit new all-time low as banks hit by U.S. fallout​

https://www.reuters.com/business/fi...-time-low-banks-hit-by-us-fallout-2023-03-10/

 

[Martin Everson]

Credit Suisse breach spills personal info of high-net-worth clients​

https://nypost.com/2023/03/02/credit-suisse-breach-spills-info-of-high-net-worth-clients/
--- quote start

Credit Suisse — which in the last month alone has reported customers withdrew $120 billion — is now informing ultra-high-net-worth individuals of yet another disaster, On the Money has learned.

The Swiss bank is telling some top clients — customers who keep $50 million or more in the bank — that sensitive personal information including social security identification, employment information, and contact details has been compromised.

Adding insult to injury, the bank told clients that it would enroll them in an identity theft protection service, Identity Works, but wouldn’t pay for other fees, some as low as $20, associated with protecting their identity as a result of the breach.

--- quote end

 

[RealDude]

Credit Suisse breach spills personal info of high-net-worth clients​

https://nypost.com/2023/03/02/credit-suisse-breach-spills-info-of-high-net-worth-clients/
--- quote start

Credit Suisse — which in the last month alone has reported customers withdrew $120 billion — is now informing ultra-high-net-worth individuals of yet another disaster, On the Money has learned.

The Swiss bank is telling some top clients — customers who keep $50 million or more in the bank — that sensitive personal information including social security identification, employment information, and contact details has been compromised.

Adding insult to injury, the bank told clients that it would enroll them in an identity theft protection service, Identity Works, but wouldn’t pay for other fees, some as low as $20, associated with protecting their identity as a result of the breach.

--- quote end

Who does not remember the advertising of the swiss banks: their data protection has top priority and personal data are exorbitantly secured against nukes & spies in the deepest bunkers of the world, without connection to the outside, because only anonymous customer numbers are kept in the bank computers without reference to the real persons.

 

[GPT]

This must be one of the last nails in the coffin for CS. For a while I was positive about them bouncing back. Now not so much. At the same time... How much more incompetence can you come across in one and the same organisation?

 

[Martin Everson]

Credit Suisse shares fall to new record low after collapse of SVB and Signature Bank​

https://www.msn.com/en-us/money/mar...ollapse-of-svb-and-signature-bank/ar-AA18ytPp

 

[Marzio]

With CS the risk is nearly zero since it's considered by FINMA one of the five systemically important banks along with UBS, Raiffeisen, PostFinance and Zuercher Kantonalbank. They will never let a systemically important bank fail.

 

[Martin Everson]

The chance is not near zero. The Swiss government would not throw tax payer money after a bad bank like how they bailed out UBS in last financial crisis. Them days are long gone.

Chances are discussions have already taken place and a contingency plan is in place over how the bank will be wound down and its "swiss banking" assets transferred to likely UBS etc but its non-Swiss assets left to maybe a non-Swiss bank.

Bailing out a self inflicted loss making bank with no business direction would be very inappropriate use of taxpayer money imho.

 

[GPT]

With CS the risk is nearly zero since it's considered by FINMA one of the five systemically important banks along with UBS, Raiffeisen, PostFinance and Zuercher Kantonalbank. They will never let a systemically important bank fail.

When CS is forced to sell of assets they become a less part of systemic risk. Its more a matter of time until CH government withdraws that status for CS. To me it comes across as the to follow roadmap..

 

[369]

With CS the risk is nearly zero since it's considered by FINMA one of the five systemically important banks along with UBS, Raiffeisen, PostFinance and Zuercher Kantonalbank. They will never let a systemically important bank fail.

I would not make such arguments on other systematically important banks because banks will be not needed anymore for money distribution.
It will go directly from central banks.
There is a reason why big banks have been splitted in the past years into customer and investment banks

The chance is not near zero. The Swiss government would not throw tax payer money after a bad bank like how they bailed out UBS in last financial crisis. Them days are long gone.

Chances are discussions have already taken place and a contingency plan is in place over how the bank will be wound down and its "swiss banking" assets transferred to likely UBS etc but its non-Swiss assets left to maybe a non-Swiss bank.

Bailing out a self inflicted loss making bank with no business direction would be very inappropriate use of taxpayer money imho.

Once the final new monetary system is added the debt will be paid out with physical gold.Of course golds value at that time will be MUCH higher than now which most people here can't imagine.

 

[gengiskhan]

Clients withdrew deposits worth 51 billion Swiss francs (approx. 28%) from Credit Suisse within one year — Tagesanzeiger

Credit Suisse’s top shareholder, the Saudi National Bank, rules out providing more financial assistance to the struggling Swiss bank, citing regulatory issues — Bloomberg

 

[Martin Everson]

Ok so seems I was absolutely correct about Credit Suisse. Here is what Finma says below. The Swiss government is NOT bailing out these banks will face a bail-in . Works similar to EU BRRD.

https://www.finma.ch/en/enforcement/recovery-and-resolution/too-big-to-fail-and-financial-stability/banks’-recovery-and-resolution-planning/

 

[Marzio]

Ok so seems I was absolutely correct about Credit Suisse.

I was dead wrong! LOL