21st March 2023 – (Hong Kong) In a bold move, Credit Suisse has decided to press ahead with its annual investment conference in Hong Kong this week, despite being taken over by its fiercest competitor, UBS, in a government-brokered deal over the weekend. The regulators in the city have confirmed that the fallout from the takeover will not impact Hong Kong’s financial hub. The Asian investment conference, which runs from yesterday to Thursday, will host over 2,000 institutional investors, entrepreneurs, hedge funds, family offices, and high-net-worth investors. However, the media sessions have been cancelled.
Chief Executive John Lee, Credit Suisse’s Chairman Axel Lehmann, and Chief Executive Ulrich Korner, were removed from the lists of speakers. Lee will be replaced by Deputy Financial Secretary Michael Wong Wai-lun this morning, while Lehmann’s welcome speech will be delivered by the lender’s Hong Kong Chief Executive Benjamin Cavalli. Global head of equities, Neil Hosie, will substitute for Korner at the conference.
The historic takeover deal, worth 3 billion francs (HK$25.4 billion) all-share, a nearly 60 percent discount to Friday’s market value, has caused shares of Credit Suisse to sink more than 60 percent and UBS to fall 10 percent. UBS Chairman Colm Kelleher has announced that they will be running down the investment banking part of Credit Suisse as UBS itself has an investment bank-like model. Even before the deal, Credit Suisse was in the process of cutting 9,000 jobs in an effort to save itself.
In Hong Kong, both the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) have confirmed that Credit Suisse’s operations in the city will stay open, and its overall exposures to the local market are not significant. The Insurance Authority also confirmed that local insurers were barely affected. Credit Suisse’s operations in Hong Kong comprise a branch supervised by the HKMA and two licensed corporations supervised by the SFC. All of them have opened for business since yesterday as usual. Customers can continue to access their deposits with the branch and trading services provided by Credit Suisse for Hong Kong’s stock and derivatives markets.
The total assets of Credit Suisse AG, Hong Kong Branch amounted to about HK$100 billion, representing less than 0.5 per cent of the total assets of the Hong Kong banking sector. The exposures of the local banking sector to Credit Suisse are insignificant. The HKMA and the SFC will stay in close touch with the Swiss authorities, and will monitor the financial markets very closely.