Credit Suisse obtains key approval to launch wealth business in China
HONG KONG, March 8 (Reuters) - Credit Suisse (CSGN.S) has received regulatory green light from China after years of waiting to launch a full-fledged wealth management business in the world's second-biggest economy, according to a company memo reviewed by Reuters.
The expansion comes after the lender suffered worse-than-expected global wealth outflows of 92.7 billion Swiss francs ($98.29 billion) in the fourth quarter.
The Swiss bank is pushing to roll out the wealth business in China by the first half of this year, according to the memo which was confirmed by a company spokesperson, targeting a 27 trillion yuan market.
Credit Suisse Securities (China), the company's China joint venture, recently obtained an investment consultancy license, which allows it to create and distribute equity research products onshore and to engage in investment advisory services, according to the memo.
The firm also scored approvals for proprietary trading and an expansion in its brokerage licence enabling it to serve clients nationwide, having previously been confined to the southern city of Shenzhen.
"We are pleased to have received these licenses as it marks a key milestone in offering wealth management services onshore in China, which is the fastest growing wealth market in the world," Edwin Low, APAC CEO of Credit Suisse told Reuters in an email statement.
Credit Suisse "plans to double the number of relationship managers in China in 2023," said Benjamin Cavalli, the company's head of wealth management for Asia Pacific, without providing details on how many relationship managers it currently has.
The boost of wealth headcounts comes in sharp contrast to a layoff it launched in November following a global overhaul since October that led to spinoffs and job cuts.
Sources told Reuters the move affected about one-third of its China-based investment banking team and nearly half of its research department which are based in Hong Kong and China.
Total assets at Credit Suisse's wealth division fell to 540.5 billion Swiss francs by the end of last year from 742.6 billion francs a year earlier.
The bank has offered higher deposit rates than its rivals to attract new funds from wealthy clients in Asia.
($1 = 0.9431 Swiss francs)
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