In a sign that Swiss-style private banking is not catching on in the United States, Credit Suisse is closing its U.S. and Canadian private banking operation.
"Even though the organization has made very good progress, especially following the restructuring of the Credit Suisse Group in 1997, both locations are still of suboptimal size," the Swiss bank said in a statement Thursday.
Credit Suisse said it will take around six months to wind down its operations. The closure will affect approximately 90 people in the United States and 30 in Canada. Private banking clients will be served in the future by Credit Suisse First Boston, Credit Suisse Asset Management, or Swiss American Securities Inc.
Swiss banks have large worldwide private banking operations which bring in a substantial portion of their annual net profits.
However, U.S. bankers said Swiss private banking has largely failed to take off in the United States because of high fees, poor performance, and lack of interest in Swiss-style banking secrecy.
Two other Swiss banks, Union Bank of Switzerland and Bank Julius Baer, also run U.S. private banking operations. Executives at both banks could not be reached for comment on whether they planned a similar move. UBS is scheduled to merge with Swiss Bank Corp. in September. At a press conference late last year, both UBS and SBC said they planned to expand on- shore private banking outside of Switzerland, including in the United States.