Credit Suisse dangles 6.5% deposit rate to lure Asia’s wealthy

CREDIT Suisse is offering higher deposit rates than its rivals to attract new funds from wealthy clients in Asia, sources said, as the embattled private bank seeks to stem outflows and stop its bankers from leaving.

The bank is offering a 6.5 per cent annual rate on new three-month deposits of US$5 million or above, said three sources who declined to be named as they were not authorised to speak to the media. The deposit rate was first reported by Bloomberg on Thursday (Mar 2).

Credit Suisse is also offering a rate of as high as 7 per cent for one-year deposits, the sources told Reuters.

“The banking sector has been responding to global rate hikes with higher rates, and Credit Suisse is fully focused on providing our clients with differentiated advice and competitive solutions,” a spokesperson for the bank said.

The offers are roughly 100 to 200 basis points higher than those of major rivals in the region, such as JPMorgan, UBS and Citigroup, two of the sources and a senior wealth manager said.

Citi and UBS declined to comment. JPMorgan did not immediately respond to requests for comment.

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The new deposit rates are higher than Credit Suisse’s lending rates in Asia, one of the two sources said, adding that this raises concerns about how the business can sustain such a funding gap. The third source said that the offers are valid until the end of this quarter, and only apply to new cash deposits, not to existing portfolios.

Total assets at Credit Suisse’s wealth division, which was hit by worse-than-expected outflows of 92.7 billion francs (S$133.1 billion) in the fourth quarter, fell to 540.5 billion Swiss francs by the end of last year from 742.6 billion francs a year earlier. REUTERS