Credit Suisse Group AG (CSGN), Switzerland’s second-biggest bank, will move its Russian capital-markets and advisory businesses from Moscow to London to cut costs, according to two people with knowledge of the matter.
The lender, which has operated in Moscow since 1991, will relocate its debt and equity capital markets and mergers and acquisition advisory businesses to London, said the people, who asked not to be identified because the information hasn’t been made public. Russian equities, fixed income and private banking will remain in Moscow, the people said. Steven Hellman, country chief executive officer at Credit Suisse, and Chairman Diana Gindin will stay in Moscow to oversee activities, they said.
“Credit Suisse remains committed to its clients in Russia,” the Zurich-based company said in an e-mailed statement today. “This involves realigning resources to growth areas and adjusting capacity to meet client needs and to manage costs.”
The bank announced plans in October to cut 1 billion francs ($1.08 billion) in annual costs by the end of 2015 in addition to a 1 billion-franc savings program started in July and a 2 billion-franc expense reduction achieved since last year. Most of the savings will come from the investment bank, Credit Suisse said. The company also said it planned to make savings at the securities unit through synergies in equities and continuing to “rationalize” businesses in some regions in fixed income, underwriting and advisory.
Credit Suisse has lost market share to state-backed competitors over the last four years, including VTB Capital and OAO Sberbank, which in January purchased Troika Dialog, Moscow’s oldest securities firm. It fell to 11th in arranging mergers and acquisitions this year from eighth in 2011, according to data compiled by Bloomberg. It ranked first in arranging equity sales and ninth in debt sales, the data show.
Credit Suisse was first in arranging equity sales after managing the London sale of shares by OAO Sberbank, Russia’s biggest lender, and OAO Megafon, a mobile operator. ING Groep NV (INGA) and Milan-based UniCredit SpA (UCG) have both said they are closing their equity businesses in Russia this year.
Anush Simonyan, head of investment banking client coverage for Russia at Credit Suisse in Moscow, left in September to join Zurich-based UBS AG (UBSN) in a similar role.
Reuters earlier today reported Credit Suisse’s plan to move businesses to London.
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