Credit Suisse has decided to postpone the planned launch of its locally incorporated bank in China, reported Bloomberg News citing people familiar with the matter.
The Swiss lender has delayed the launch of its biggest mainland project by a year to 2024. This is said to be the second postponement of the project, which was first announced by the bank two years ago.
A local entity is expected to help Credit Suisse establish a branch network to drive its wealth management ambitions in the mainland.
One of the sources said that Credit Suisse is delaying the project due to the slow licensing process on the mainland.
The bank has also been pressed by its Zurich-based executives on the need to put resources into the project amid slowing the economy and dull phase in deal-making triggered by Covid-19 lockdowns and increasing regulatory crackdown on private enterprises in the region, according to the person.
The bank, whose autonomy in Asia suffered a blow from the recent global reorganisation, is also said to be strengthening its rein on investments.
Credit Suisse CEO Thomas Gottstein said in a recent conference: “We are maybe waiting a little bit with some of the growth investments.”
According to Gottstein, the bank is not delaying its application for a Chinese local bank and the plan for the launch is underway.
He said that the firm is freezing its hiring of relationship managers.
This week, Credit Suisse flagged a likely second-quarter loss amid a slump at its investment banking and trading units. The bank also cited the widening credit spreads and client deleveraging in a volatile markets as the reason for potential loss.
The bank said that it is accelerating cost initiatives across the group to maximise the savings from next year onwards.
Meanwhile, a recent report by Bloomberg News suggested that Credit Suisse is weighing another round of job cuts following the loss warning.
The bank is said to considering layoffs across divisions including investment banking and wealth management across various regions.
Last month, a report by Reuters said that Credit Suisse was looking to strengthen its capital base to recover from billions of losses last year and a number of costly legal troubles.