Credit Suisse Buys Morgan Stanley’s Wealth Management in Europe

Wednesday, 27 March 2013 10:51 AM

March 27 (Bloomberg) -- Credit Suisse Group AG, the second- biggest Swiss bank, agreed to buy Morgan Stanley’s wealth management operations in Europe, the Middle East and Africa.

The businesses, which exclude Switzerland, manage $13 billion of assets, mainly for so-called ultra-high net worth individuals, Zurich-based Credit Suisse said today in an e- mailed statement.

The deal, which is structured as an asset purchase, will probably close in the third quarter, according to a statement from New York-based Morgan Stanley. No purchase price was disclosed.

Revenues at Credit Suisse’s wealth management business, which had 798.5 billion Swiss francs ($841 billion) of assets at the end of last year, are under pressure from subdued client activity, low interest rates and withdrawals by customers in western Europe. Gross margin, which reflects how much the bank makes in revenue on assets it oversees, fell to 110 basis points in the fourth quarter from 115 basis points a year earlier. A basis point is one hundredth of a percentage point.

Credit Suisse’s wealth management clients added a net 2.9 billion francs in new funds in the fourth quarter, restrained by 4.4 billion francs of outflows in western Europe. Chief Executive Officer Brady Dougan said the bank expects as much as 20 billion francs in further outflows over the coming two to three years.

--Editors: Dylan Griffiths, Frank Connelly.

To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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