Bank seeks to attract new funds and retain clients amid challenges
Credit Suisse Lures Wealthy Clients with Competitive Deposit Rates
In a bid to stop the outflow of funds and prevent further losses, Credit Suisse is offering a 6.5% annual rate on new three-month deposits of US$5 million or more, sources revealed. This strategy is part of the bank’s efforts to draw in wealthy clients across Asia, as it faces challenges including declining assets and departures of key bankers.
The bank is also providing rates of up to 7% for one-year deposits, offering rates significantly higher than its competitors such as JPMorgan, UBS, and Citigroup, according to sources familiar with the matter. These higher-than-average rates are seen as an attempt to regain momentum following a tumultuous period.
Challenges in Sustaining High Deposit Rates
While these deposit rates offer attractive returns to new clients, some concerns have emerged regarding Credit Suisse’s ability to sustain this funding gap, as the deposit rates are higher than the bank’s lending rates in the region. The special offers are valid until the end of the current quarter and apply only to new cash deposits. Existing portfolios will not benefit from these higher rates.
Credit Suisse’s wealth division suffered a significant loss of assets, dropping from 742.6 billion Swiss francs in 2022 to 540.5 billion francs by the end of last year, largely due to outflows of 92.7 billion francs in the fourth quarter. The bank’s new deposit initiatives are seen as part of its strategy to counter these setbacks and restore client confidence.
