Credit Suisse has scrapped plans to set up a locally incorporated bank in China to sidestep a potential regulatory conflict arising from its merger with UBS , said two sources with direct knowledge of the matter.
Embattled Credit Suisse had been preparing for years to set up a wholly owned local bank in China. A locally incorporated bank would have boosted its presence in the country by allowing it to set up a branch network to draw deposits and expand its onshore wealth management business.
It was not immediately clear if the local regulators have been informed of Credit Suisse's decision, but one of the sources said that the move to drop the plan had been communicated to the bank's local staff.UBS, twice as big as Credit Suisse by assets, agreed to buy its cross town rival for 3 billion Swiss francs in stock and to assume up to 5 billion francs in losses in March.
Credit Suisse is trying to retain bankers at the joint venture, as it struggles to maintain the number of staff in order to remain compliant before it decides whether it should be sold, the third source said.
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