Credit Suisse may sell part of German private bank: source

Fri Jun 7, 2013 7:35am EDT
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By Oliver Hirt

ZURICH (Reuters) - Credit Suisse CSGN.VX may sell part of its private bank in Germany, a source close to the bank said on Thursday, part of efforts to improve profits by focusing on the mega-rich rather than a larger "mass affluent" client base.

Swiss banks have struggled with profitability in their European onshore operations, which have become more important as regulators crack down on Switzerland's lucrative status as an offshore banking and tax haven.

Larger banks like Zurich-based UBS UBSN.VX and Credit Suisse are responding by stepping up efforts to court the mega-rich, seen as better for business than the moderately rich because transaction volumes tend to be far larger, and may feed other business units such as investment banking.

Credit Suisse's sale deliberations are part of a plan to focus more on those wealthiest clients, with more than $50 million in assets, the source said. The German unit's client base is far broader and more scattered than the narrow, ultra high net worth focus Credit Suisse is seeking.

Credit Suisse declined to comment on its plans for Germany.

The Swiss bank estimates that there are 84,500 individuals across the globe with more than $50 million in net assets. Of these, it says that 29,300 are worth at least $100 million and 2,700 breach the $500 million mark.

"If you are successful in acquiring one of these clients, this will move the needle," Rolf Boegli, head of premium clients at Credit Suisse, told the Reuters Global Wealth Management Summit this week.

Switzerland's tradition of banking secrecy has helped to make it the world's biggest offshore financial center, with $2 trillion in assets. But its offshore status has come under fire since the 2008 financial crisis from cash-strapped governments clamping down on tax evasion. Authorities in Germany and France also investigating Swiss banks.   Continued...

The logo of Swiss bank Credit Suisse (CS) in seen in front of an office building at the Bahnhofstrasse in Zurich April 18, 2013. REUTERS/Arnd Wiegmann