The absorption of Credit Suisse by UBS will have immediate effects on the failed Swiss bank’s business in Spain, where it had managed to generate a countercurrent dynamic to that of the parent company and take advantage of some opportunities resulting from Brexit, according to sources close to the same entity. The subsidiary was overcoming two years of continuous management turnover and profiting from its flagship business: the management of large assets.
The operation that was announced yesterday now frustrates the plans of a subsidiary that has offices in Madrid, Barcelona and Valencia, and that, without ever touching retail banking, is dedicated to investment banking, the great fortunes and the representation of the parent through Credit Suisse Europe.
Credit Suisse will be sold for just over 3 billion euros to its rival UBS to form a group with 1.5 trillion assets under management. The intervened bank fell 55% on the stock market yesterday, to a value very similar to the transaction, while UBS rose 1.2%. This operation and the immense liquidity placed by the National Bank of Switzerland at the service of the entities should serve to contain the crisis.
In Spain, Credit Suisse employs around 400 people and has its main offices on a corner of Carrer Ayala in Madrid, in the Salamanca district. According to the latest data available from the commercial register, it has deposits in Spain for almost 700 million euros. Its auditor is PwC, which has been validating its accounts without exception, and the assets under management are close to 10,000 million.
His plan in Spain happened until this weekend to gain positions in private banking. UBS, its rival until yesterday, left the country last year, after selling the business to Singular Bank, while another major competitor, France’s BNP Paribas, transferred its private banking in Spain to March Bank.
Credit Suisse saw the opportunity to attract resources from large Spanish fortunes, as other international banks, such as Rothschild, Safra and Julius Baer, ??are strengthening with signings, the sources explain.
One of the reasons for Credit Suisse’s confidence in “discretionary wealth management” in Spain is the change in the sicav regime, the collective investment vehicles with reduced taxation. The Central Government has required that the contributions of all participants be real, which has caused many sicavs to disappear and family offices to look for banks such as Credit Suisse to invest in them.
In the area of ??investment banking, the Spanish subsidiary avoided the lack of IPOs and the sale of companies at the end of last year, but it is doomed. According to Bloomberg, UBS is interested in the wealth management unit and not the investment bank of Credit Suisse, which does not inspire confidence.
Credit Suisse Spain, which has been operating in the country since 1998, will encounter an added difficulty. It is difficult for UBS to take on the interesting part of the business, the high-net-worth part, since last year, when it sold its activity in Spain to Singular Bank, it pledged not to return within three years of the agreement with a non-compete clause. If this clause is applied, which is being interpreted by lawyers, UBS would be forced to close or sell what remains of Credit Suisse in Spain.
The Credit Suisse subsidiary has also been carrying out reorganization tasks in Spain for several years. After a dance of chairs that began in 2020 in which there was the departure of twenty bankers, the CEO of the subsidiary, Wenceslao Bunge, resigned from the position.
Since then there has not been a visible boss, but two managers who report separately to Zurich. Pablo Carrasco heads the large fortunes and Nacho Moreno heads the investment banking area. Each for their part, they have been strengthening the different divisions over the last two years, so that they have signed managers from several banks, including one from UBS.
