- The United States government has subpoenaed a number of Swiss banks.
- Credit Suisse had a solid reputation for catering to wealthy Russians before Ukraine war.
The U.S. Department of Justice is reportedly looking into whether or not top bankers helped Russian billionaires circumvent sanctions against their nation. Credit Suisse Group AG and UBS Group AG are allegedly two of the institutions under scrutiny.
According to Bloomberg, the United States government has subpoenaed a number of Swiss banks. UBS had planned to acquire its rival bank, which had been in business for 166 years, when a crisis disrupted the industry. Subpoenas were allegedly sent to employees at a number of major U.S. institutions, according to sources familiar with the investigations.
Furthermore, according to the evidence gathered, the Justice Department is investigating who at the bank had contact with “sanctioned clients” and how they were vetted over the period of many years. After then, further investigations into those bankers and advisors may be launched to see whether or not they violated any penalty legislation.
More Trouble For Struggling Banks
Before the Russian invasion of Ukraine resulted in further sanctions, Credit Suisse had a solid reputation for catering to wealthy Russians. At its peak, when the Swiss bank was in charge of about $60 billion in assets for Russian customers, it generated between $500 million and $600 million in annual revenue from these clients.
Moreover, when Credit Suisse decided to cut ties with Russian clients in May of last year, the bank was holding more than $33 billion on behalf of individual Russian citizens. Despite having a bigger wealth management business, this was almost 50% higher than UBS.
The banking sector is already under pressure due to recent closures and a decline in banking stock prices. This additional blow will only cause more harm.
