Credit Suisse Plans to Spread Jobs Across Europe Post Brexit
Credit Suisse Group AG CS is planning to distribute its trading, investment-banking and wealth management operations post Brexit to various European cities, per an article by Bloomberg.
Frankfurt, Madrid and Paris top the bank’s list of preferable locations. Though no final decision has been taken so far, the bank has ruled out Dublin and Amsterdam as potential trading hub.
The bank is in talks with the regulators in Germany, France and Spain for establishing a hub in European Union. Currently, Credit Suisse has a full banking license in Germany and a full broker license in Spain, along with a wealth management hub in Luxembourg.
Last year, the bank moved jobs to Dublin to provide hedge-fund services. However, it is considered only as a third-country branch rather than a full subsidiary. Thus, it has to receive the necessary regulatory clearance in order to become a base for passporting into the rest of the European Union.
Credit Suisse is one of the few lenders which are yet to come to a decision regarding shifting operations. Britain’s exit from the European Union would snaps the rights of U.K-based banks to serve customers from London. This has set the companies to look for a new hub.
Among others, the Swiss bank, UBS Group AG UBS is currently mulling over Frankfurt as a plausible option for its trading headquarters in the region
Amid these ongoing restructuring, the New York’s banking regulator imposed a fine of $135 million on Credit Suisse, accusing it of trading ahead of client orders and sharing information with other banks to boost its profit by influencing currency prices and benchmark rates.
These restructuring moves and litigation expenses are likely to weigh on the bank’s financials. However, its focus on improving Wealth Management arm bodes well for the long term.
Shares of Credit Suisse have gained 11.7% year to date, underperforming industry’s growth of 16.5%.
Currently, Credit Suisse carries a Zacks Rank #4 (Sell).
Stocks to Consider
A couple of better-ranked stocks in the same space are Shinhan Financial Group SHG sporting a Zacks Rank #1 (Strong Buy), and The Bank of N.T. Butterfield & Son Limited NTB carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shinhan Financial has witnessed an upward earnings estimate revision of 8.5% for 2017, over the last 30 days.
Bank of N.T. Butterfield & Son has witnessed an upward earnings estimate revision of 2.2% for 2017, over the last 30 days.
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