Credit Suisse has signed an agreement to refer its Prime Services and Derivatives Clearing customers to French rival BNP Paribas.

The move follows the scandal-ridden Swiss investment giant’s decision to shutter its prime service unit, which lends money to hedge funds and processes their trades.

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The unit, part of the bank’s investment banking division, suffered a $5.5bn loss due to the implosion of Archegos Capital.

Credit Suisse, which has been revamping its business under chairman António Horta-Osório and CEO Thomas Gottstein, is folding the prime service to strengthen its focus on wealth management business.

Credit Suisse said that the agreement with BNP Paribas will ‘ensure a smooth migration of business’ for its hedge fund clients.

“Should customers seek to benefit from the referral agreement between Credit Suisse and BNP Paribas, there will be a streamlined process in place to facilitate them obtaining Prime Services from BNP Paribas, under its terms,” the bank said in a statement.

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Meanwhile, BNP is currently signing up the clients of Deutsche Bank’s prime brokerage business following the German bank’s exit from equities trading business in m 2019.

The transfer is expected to be concluded this year.

Credit Suisse Q3 results

Credit Suisse reported a net profit of $476m (CHF434m) for Q3 2021, a plunge of 21% compared to CHF546m in the year-ago quarter.

The Swiss bank’s profits were hit by $620m (CHF564m) of litigation expenses related to various issues including the Mozambican corruption scandal and Greensill Capital explosion.

The profits were also affected by a higher tax rate.