Credit Suisse chooses Frankfurt as key post-Brexit hub
Bank has already moved several hundred million dollars of assets to support new centre
Credit Suisse has picked Frankfurt as a key post-Brexit centre for its investment banking and capital markets business and has already moved several hundred million dollars of assets to support the new hub.
The corporate manoeuvres to create the new structure are revealed in the notes to Credit Suisse’s expectation-beating second-quarter earnings the bank reported on Tuesday.
The Swiss group, one of the last big international banks to reveal its post-Brexit plans, is also moving 50 traders to Madrid, as reported earlier this week, and recently confirmed it had been granted a new brokerage licence in Paris.
In Frankfurt, Credit Suisse is re-purposing an existing entity so that it can become part of the group’s Investment Banking & Capital Markets unit, which advises companies on mergers and acquisitions, raising debt and equity.
A person familiar with the plans said the change in structure was “certainly part of the Brexit strategy” and would facilitate Credit Suisse doing investment banking and capital markets business out of Germany.
The financial statements show that the transfer affects about $200m of net assets held by Credit Suisse (Deutschland) Aktiengesellschaft, which have been moved from Credit Suisse’s wind-down unit to IBCM.
The person would not comment on the number of bankers who might move to Germany, but it is likely to be in the range of about 50.
Credit Suisse will move some bankers to other EU corporate centres, as well as its Paris brokerage, bringing the total moves from London to about 250 from the Swiss bank’s 5,500 headcount there.
Frankfurt and Paris, the favoured post-Brexit choices of large US banks, had long been mooted as potential homes for Credit Suisse’s EU businesses after Brexit, along with Amsterdam.
Credit Suisse had explored converting its Irish third country branch into one of its Brexit hubs, but decided against this after discussions with the Central Bank of Ireland. Credit Suisse will continue to run its prime brokerage trading business from Dublin under the existing licence.
Several other banks also said they had difficulty obtaining licences in Dublin for post-Brexit hubs, though Bank of America has managed to get licences to base its EU trading and banking entities in Dublin.
While the investment bank has become a smaller part of Credit Suisse under a three-year restructuring plan, chief executive Tidjane Thiam argues that they are essential for supporting the wealth management activities at the centre of the group.
His strategy won plaudits from analysts and investors earlier in the week when the bank announced an 81 per cent rise in second quarter pre-tax profits versus a year earlier.