Credit Suisse seeks to win back rich clients with above-market deposit rates

SINGAPORE/LONDON - Credit Suisse, driven into a rescue by UBS after heavy cash outflows, is seeking to claw back business by offering rich clients some of the highest deposit rates in the industry, according to a person familiar with the bank’s activities in Asia.

On three-month deposits above US$1 million (S$1.3 million), Credit Suisse will pay 5.88 per cent, the person added, but did not say whether the rates apply to only Asian clients or across other geographies too.

At NatWest, similar deposits get 5.41 per cent, according to public disclosures.

Credit Suisse suffered an exodus of client funds in the first quarter that brought the lender to the brink of collapse.

Regaining clients’ money and trust is crucial for UBS, which closed its takeover of the bank on June 12 and is still running the business as a separate entity.

Bloomberg News last week said UBS planned to retain a few hundred relationship managers in Asia to bring the total to 1,200.

At Credit Suisse’s asset management unit, which was also hit by clients walking, outflows have not yet stopped, a source told Reuters earlier in June. Credit Suisse declined to comment.

The bank has held cash campaigns to attract clients in the past, said another person with knowledge of the matter, but this time it needs to offer a significant premium to draw clients back.

UBS agreed to take over its 167-year-old rival over a weekend in mid-March, creating a giant Swiss bank with a balance sheet of US$1.6 trillion.

The rescue, backed by public funds, was designed to prevent Credit Suisse’s collapse from triggering a wider banking crisis.

Chief executive Sergio Ermotti said, on the day the deal closed, that about 10 per cent of Credit Suisse employees had left ahead of the completion, and he had been racing to finalise the deal to stem the defection of clients.

UBS has said a full integration of Credit Suisse following the takeover will take up to three to five years. REUTERS