According to Bloomberg, Credit Suisse will review its business in China in its next board meeting in Singapore.
Insider sources told the news outlet that senior executives at the investment banking firm have questioned whether it should expand its existing securities business and wealth management unit in the country.
The meeting will consider whether to reduce its business in China even though it had heavily recruited new employees. Asia managers will have to convince their bosses in Zurich that China is still an important place for their international business.
Bloomberg said that the bank plans to reduce the investment bank business after multiple losses.
Downsizing its business activities in the world’s second-largest economy is seen as a dramatic outcome for the Swiss investment banking firm.
In 2020 the bank got approval from Beijing to become a major shareholder in securities joint-venture.
China Securities Regulatory Commission (CSRC) back then allowed it to increase capital from 33.3% to 51% in its Credit Suisse Founder Securities by capital injection.
The departure of senior executives at its China securities venture was seen as a troubling sign for the firm, which has slowed down Beijing regulatory approval.
Its Chinese securities joint venture provides investment banking services, such as stock and bond underwriting, as well as other financial advisory services.
As reported by Bloomberg, the bank lost nearly half of its senior personnel management at its China securities ventures, including the chief financial officer, compliance head, and information officer.
Credit Suisse lost 4.7 billion dollars in the Archegos Capital Management crisis in 2021 that shook the financial management world.
Archegos defaulted on margin calls from key global investment banks, including Suisse. As a result of the incident, the chief risk and compliance officers and head of the investment bank of Credit Suisse reportedly stepped down.