Credit Suisse has scrapped plans to set up a locally incorporated bank in China to avoid a potential regulatory conflict arising from its merger with UBS, according to a report by Reuters.
Reuters reported that Credit Suisse’s decision was made as UBS, which is in the process of acquiring Credit Suisse, already has a locally incorporated bank in China.
A financial entity can only apply for and get one such licence in China.
Credit Suisse declined to respond to queries from FSA on this matter.
Credit Suisse has been making plans to set up a wholly-owned local bank in China. It also intended to set up a branch network to draw deposits and expand its onshore wealth management business there.
The acquisition of Credit Suisse by fellow Swiss bank UBS was initiated by Swiss authorities in March to avert contagion in global banking. As part of the deal, UBS agreed to buy Credit Suisse for SFr3bn ($3.3bn) in stock and to take on the latter’s losses of some SFr5bn.