Credit Suisse employs about 7,000 people across three Indian cities, including Pune, in technology back offices, according to reports. The merger with UBS may lead to some layoffs in these back offices in a bid to rationalise staff at Credit Suisse, one of the most influential banks in global history. In India, Credit Suisse offers wealth management, investment banking and brokerage services.
Credit Suisse’s equity strategists Neelkanth Mishra and Ashish Gupta recently quit the bank to join the Axis Bank group. These posts are likely to be filled up by UBS analysts.
“Let me be very specific on this. UBS intends to downsize Credit Suisse’s investment banking business and align it with our conservative risk culture,” UBS chairman Colm Kelleher said on Sunday at a press conference announcing the deal. “We will be derisking a lot of the tricky businesses that we are inheriting.”Kelleher is keen on retaining Credit Suisse’s profitable Swiss unit as well as the wealth management division but is less enthusiastic about its investment banking segment.
Foreign banks have a relatively smaller presence in India with a 6% share in total assets, 4% in loans and 5% in deposits. They are more active in the derivative markets (forex and interest rates) where they have a 50% share. Most of them are present as branches of the parent bank with only a few present as wholly-owned subsidiaries.
Nevertheless, they retain capital, liquidity and make similar annual report disclosures as Indian banks. Top five foreign banks in India by assets are HSBC, Citibank (has now sold consumer business to Axis), Standard Chartered, Deutsche Bank and JP Morgan.
Credit Suisse has a 1.5% share among foreign banks’ assets and 0.1% in sector assets. Credit Suisse has only 1 branch in India and has a total asset base of more than Rs 20,000 crore, which is the 12th largest among foreign banks. The bank’s 70% of assets are in G-secs (short term) and has nil NPLs. Alike foreign banks, its off-balance sheet is 7x the total assets and it is the 14th largest foreign bank in the system.“Given the relevance of Credit Suisse to India’s banking sector, we see softer adjustments in assessment of counter-party risks, especially in the derivative market. We expect RBI
While UBS and Credit Suisse are present in India in the investment banking and wealth management areas, the latter has a banking licence with just one branch operating in Mumbai. UBS will have to seek the RBI’s nod to continue with Credit Suisse’s bank licence, according to reports. The acquisition of Credit Suisse gives UBS another shot at offering banking services in India, according to reports.
Credit Suisse is also among India’s top three foreign bank-backed private wealth managers, according to reports. With assets of over $5 billion in 2020, it ranked third next to Standard Chartered and Barclays, according to Asian Private Banker.