(Bloomberg) -- Credit Suisse Group AG is facing a further delay in getting approvals for some of its China operations after a flurry of senior management departures, according to people familiar with the matter.
The Swiss bank lost nearly half of the senior personnel management at its China securities ventures in recent months, including Chief Financial Officer Annie Qiu, compliance head Xu Yang, and Chief Information Officer Larry Tung, the people said, asking not to be identified discussing a private matter.
As a consequence of the departures, the China Securities Regulatory Commission told the lender it will postpone any on-site inspection until those positions are filled, one of the people said. The inspection is the final step needed before Credit Suisse is allowed to start building out its wealth management business onshore and expand its equities trading services beyond Shenzhen into other cities.
The delay is adding to woes at the European lender which is reeling from a series of scandals that led to billions dollars of losses, spurring a strategic review of its investment bank, an exodus of talent and thousands of job cuts. The bank had planned to more than triple its headcount in China to accelerate its pursuit of the nation’s wealthy and growing rank of entrepreneurs, and is seeking to take full control of its securities venture.
A spokeswoman at Credit Suisse declined to comment. The CSRC didn’t immediately respond to a request for comment.
It’s been two years since Credit Suisse won approval to take control of the securities venture but the bank still hasn’t been given a greenlight to implement its onshore expansion.
The bank plans to install Wang Jing as chief executive officer for the securities venture after a senior management reshuffle in April, according to the people. Tim Tu had stepped down from the CEO role in less than two years to become co-head of the Asia-Pacific financing group.
Wang was hired two years ago from China Merchants Bank Co. to develop its onshore wealth management business in the world’s most populous nation, but the bank has yet to obtain final approval to provide services to wealthy mainland China clients.
Credit Suisse has also delayed the targeted launch of its locally incorporated bank to 2024, the second postponement since the project was conceived two years ago, people familiar said in June. Thomas Gottstein, who exited last month as the group chief executive officer, said at that time its overall roll-out in the nation was on track.
China’s lengthy and often opaque application process has always been a hurdle for foreign financial institutions, with geopolitical tensions often adding to the uncertainty. Regulators can impose onerous demands before granting licenses, including minimum staff numbers, senior management qualification, and other compliance requirements.
Credit Suisse won control in its securities venture in April 2020, a month after Morgan Stanley and Goldman Sachs Group Inc. received their green-lights. Switzerland’s second-largest bank agreed to pay $89 million to increase its stake in Credit Suisse Founder Securities Ltd. to 51% from 33%, and currently can only run an investment-banking business across the nation.
Goldman Sachs won approval for several onshore licenses late May, eight months after taking a 100% ownership in October. Morgan Stanley is now moving closer to getting full control of its fund management unit and is seeking five new licenses for its futures, derivatives, brokerage, research and market-making businesses.
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