The departures highlight the challenge the combined firm faces in retaining clients, after UBS agreed to buy its local rival in a government-backed emergency takeover.
customers of Credit Suisse Group AG have withdrawn $4.4bn of funds in the US and Europe since the bank agreed last month to be acquired by rival UBS Group AG, and recent entries suggest that the worst of this exodus may be over.
Credit Suisse’s European funds saw net redemptions of $3.8 billion between March 20 and April 6, while US funds saw outflows of $575 million more, according to data from Morningstar Inc. The figures only they include funds that report daily figures and do not represent the entire universe of Credit Suisse asset management.
The departures highlight the challenge the combined firm faces in retaining clients, after UBS agreed to buy its local rival in a government-backed emergency takeover. UBS Chairman Colm Kelleher said the deal is likely to take months to close and full integration up to four years.
The highest number of daily outflows was recorded on March 21, two days after the transaction was announced, when US$813 million was withdrawn. Since then, the ransoms have decreased and, on April 5 and 6, about US$230 million were repaid.
“Credit Suisse outflows are less than I would have expected”said Johann Scholtz, an equity research analyst at Morningstar. The absolute number “sounds dramatic,” but the outflows correspond to only about 2.5% of the company’s assets under management, he said.
On the other hand, the Swiss Parliament’s refusal to approve state guarantees for UBS’s acquisition of Credit Suisse may not have been entirely symbolic, as heightened market uncertainty apparently led both banks to seek more liquidity from the central bank.
Local banks’ demand deposits at the Swiss National Bank rose by about 16 billion francs ($18 billion) last week, according to data from the latter published Monday. The most likely reason for this increase in money in circulation is that UBS and Credit Suisse obtained more liquidity from financing provided by the Swiss National Bank, according to Karsten Junius, chief economist at Bank J Safra Sarasin.
Source: Ambito
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