Credit Suisse Recieves Regulatory Approval From China To Launch Management Business

In a company memo reviewed, Credit Suisse has received regulatory approval from China to launch a full-fledged wealth management business in the world's second-largest economy after years of waiting.

The expansion comes after the lender experienced larger-than-expected global wealth outflows in the fourth quarter, totaling 92.7 billion Swiss francs ($98.29 billion).

According to the memo, Credit Suisse Securities (China), the company's China joint venture, recently obtained an investment consultancy licence, allowing it to create and distribute equity research products onshore as well as engage in investment advisory services.

In addition, the firm received approvals for proprietary trading and an expansion of its brokerage licence, allowing it to serve clients nationwide after previously being limited 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 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 increase in wealth headcounts contrasts sharply with a layoff that began in November following a global overhaul that began in October and resulted in spinoffs and job cuts.

According to sources, the move affected roughly one-third of its China-based investment banking team and nearly half of its Hong Kong and China-based research department.

Credit Suisse's wealth division's total assets fell to 540.5 billion Swiss francs at the end of last year, down from 742.6 billion francs the previous year.

To attract new funds from wealthy Asian clients, the bank has offered higher deposit rates than its competitors.