Credit Suisse evaluates prime brokerage business as part of October cuts: source

Sun Dec 7, 2014 9:34pm EST
 
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(Reuters) - Credit Suisse AG is considering scaling down its prime brokerage business as part of already announced efforts to reduce risk in its investment banking division, a person familiar with the matter told Reuters.

Credit Suisse like many investment banks is reconciling its ambitions with increased regulation.

An expert panel on Friday recommended that the Swiss government require UBS and Credit Suisse be subject to a higher leverage ratio.

Switzerland wants its top banks to have a ratio of 4 percent or more by around 2019 which is higher than the current provisionally set ratio of 3 percent imposed by international regulators.

In October, Credit Suisse said investment banking income had slid nearly a fifth and said it would was going to ramp down the rates business with the aim of lowering risky assets by $7 billion and leverage by $60 billion.

"The prime brokerage business is indeed part of the risk reduction exercise announced earlier," the person familiar with the matter said.

The Financial Times first reported Credit Suisse was planning to shrink its prime brokerage business.

The bank aims to have businesses in its investment bank with top-three market positions that can earn a healthy return on capital, and in the past has chosen to exit or scale-back in many of the areas which did not meet the criteria, such as commodities.

(Reporting by Shivam Srivastava in Bengaluru,; Katharina Bart in Zurich and Tom Miles in Geneva, editing by David Evans)

 
National flags of Switzerland fly over the entrance of the headquarters of Swiss bank Credit Suisse in Zurich July 31, 2014.  REUTERS/Arnd Wiegmann