Credit Suisse's once strategically important business with wealthy Russians is largely at a standstill, but the bank is refraining from layoffs for now.
Credit Suisse's business in Russia has thrived over the years with more than 120 employees before the invasion of Ukraine and the roughly 28 billion Swiss francs ($29.2 billion) of assets under management.
Now, however, the wheels of that business are turning slowly due to the bank implementing all applicable sanctions against Russian individuals and organizations, and no new business being conducted for months. The upshot was putting most of the employees on its payroll in Russia on paid leave, as CEO Thomas Gottstein announced in April.
What's a Banker to do?
An extensive report from «Bloomberg» (behind paywall) on Credit Suisse's activities in Russia said that the bank dismissed some 70 employees at various desks in Russia. Research by finews.com, however, indicates that advisors and support staff have instead been reassigned to other activities within the bank's wealth management unit.
Meanwhile, the bank continues to service non-blocked assets and other services are still ongoing. It is only the Credit Suisse employees in Moscow who are subject to inactivity.
To be sure, the once-coveted business with Russia's rich has lost all appeal for Swiss banks, as assets of over 100,000 Swiss francs can no longer be serviced for Russian clients without an EU or Swiss passport or a corresponding residence permit. At the same time, clients are withdrawing these assets from Switzerland.
Compliance Bites
While it remains uncertain how much of the approximately 200 billion francs of Russian assets held by Swiss banks have fled the country, recent reports estimate the amount frozen in those institutions to be 6.3 billion francs.
In an environment of increasing compliance costs and high risk eating away at margins, that business is no longer worthwhile, experts told finews.com.
