Swiss multi-national bank Credit Suisse is set to shut down its private banking unit in Russia and redirect client accounts to Switzerland, according to Forbes Russia.
The bank will continue to operate in the country, but it is understood that its range of private services for wealthy clients will now be limited to investment advice. Any Russian clients that want to continue private banking will have to move their accounts to Switzerland.
According to the bank, the step is a part of its international business policy with products and services constantly changing for higher efficiency and the move will not affect too many clients as only a limited number used the service.
“Credit Suisse will keep its banking license and continue to offer onshore banking services for international and local institutional, corporate and financial clientele via its Russian investment banking unit,” the bank said in a statement.
The decision was made against the backdrop of Swiss prosecutors investigating allegations against the bank’s former manager Patrice Lescaudron. Credit Suisse filed a criminal complaint against him in December, accusing him of misconduct.
In March, Swiss prosecutors charged ex-Credit Suisse wealth manager Lescaudron with fraud, misappropriation and criminal mismanagement.
Lescaudron was hired in 2004 and within two years was managing US$ 1.6bn for some of the bank’s wealthiest clients. Three of Credit Suisse’s major clients, all of whom hail from former Soviet republics, filed criminal complaints against the bank claiming they’ve lost millions.
Lescaudron allegedly conducted unauthorized trades with clients’ money by forging their signatures. He claimed he was seeking to cover his clients’ losses, in some cases out of loyalty to them, Bloomberg said in a report at the time.
Georgian Prime Minister
One of Credit Suisse’s major clients was Bidzina Ivanishvili, a Georgian billionaire who made his money in the Russian Federation in the 1990s before returning to Georgia and eventually serving a year as Prime Minister.
Credit Suisse has also filed a criminal complaint against Lescaudron, who has been fired, Bloomberg said. Prosecutors have yet to decide whether to take the case to trial, according to Bloomberg. If convicted, Lescaudron could face up to 10 years in prison.
The source close to Credit Suisse, told Forbes Russia, that the decision to shut an onshore platform was not connected to the worsening economic situation or the investigation.
“The platform is expensive, and the bank has to decide if it is relevant to the customer needs. The management has concluded it wasn’t,” the source said, stressing that most of the clients have money deposits abroad.