Credit Suisse freezes $5B in Russian money amid U.S. sanctions

ZURICH - One of Switzerland's largest banks, Credit Suisse, has frozen roughly 5 billion Swiss francs ($5 billion) of money linked to Russia to avoid falling foul of U.S. sanctions, according to its accounts, further increasing pressure on Moscow.

The move by Credit Suisse, which owned aircraft surrendered by Russian tycoon Oleg Deripaska and had lent money to Russian oligarch Viktor Vekselberg before the sanctions, underscores a widespread fear among banks of reprisals from Washington for working with targeted Russian individuals and entities.

For Russia's elite, such steps could close off an important avenue for finance as well as a safe haven for billions of roubles of their wealth.

"Credit Suisse works with international regulators wherever it does business to ensure compliance with sanctions, including compliance with sanctions involving Russia," said a spokeswoman for the bank, which did not identify the owners of the money.

Long popular with wealthy Russians for its combination of bank secrecy, political stability and glitzy ski resorts such as Zermatt and St. Moritz, Switzerland has become one of the most important destinations for money leaving Russia.

Roughly $6.2 billion, or 14 percent of total Russian cross-border outflows, went to Switzerland in 2017 — almost three times as much as went to the United States, according to Russian central bank data.

The latest round of sanctions was announced in April by U.S. Treasury Secretary Steven Mnuchin to penalise Russia for its annexation of Crimea, involvement in the war in Syria and "attempting to subvert Western democracies".

More could follow.

U.S. President Donald Trump has said he would like better ties with Moscow, but although he met Russian President Vladimir Putin last month, relations between the countries remain strained.

Earlier this month, members of Congress, where both chambers are controlled by Trump's fellow Republicans, called for more action, including introducing new sanctions legislation "from hell", to punish the Russian "menace".

While U.S. sanctions do not apply to neutral Switzerland, its banks are obliged to follow suit because they depend on access to the dollar and could be blackballed by the United States for any missteps.

The Credit Suisse asset freeze took place in the second quarter. It is rare for a Swiss bank to reveal such details.

Two of its rivals, UBS and Julius Baer, said they also respected international sanctions, but declined to say whether they had taken similar steps.

"UBS ... implements worldwide at least the sanctions currently imposed by Switzerland, the U.N., the EU and the U.S.," said a spokesman for UBS.

A spokesman for Julius Baer said it "cooperates with international regulators ... in the field of sanction regulations".

Credit Suisse is being cautious in part because of earlier bad experiences. In 2009, it reached a $500 million settlement with U.S. authorities over dealings with sanctions-hit Iran.

There have been other instances where European banks have been punished. In 2014, France's BNP Paribas agreed to pay a record $8.9 billion for violating U.S. sanctions against Sudan, Cuba and Iran.

Switzerland's banking watchdog FINMA does not require Swiss banks to enforce foreign sanctions, but has said they have a responsibility to minimise legal and reputational risks.

source: news.abs-cbn.com

Bitcoin rockets above $7,000 for the first time

LONDON - Digital currency bitcoin took another leap higher on Thursday, rocketing above $7,000 for the first time after a more than tenfold increase in its value over the past year.

Bitcoin has seen eye-watering gains in recent months, having more than doubled in value in the past seven weeks alone. It is on track for a fifth consecutive quarter of increases -- a run not seen since 2012-2013, when it was approaching $100 for the first time.

It hit as high as $7,354.10 on the Luxembourg-based Bitstamp exchange on Thursday, before settling back to $7,030 by 1630 GMT, still up over 4 percent on the day.

Credit Suisse Chief Executive Tidjane Thiam expressed caution about the booming cryptocurrency, saying the current interest in it could eventually subside.

"From what we can identify, the only reason today to buy or sell bitcoin is to make money, which is the very definition of speculation and the very definition of a bubble," he said on Thursday.

The latest rally was driven in large part by news earlier this week that the world's largest derivatives exchange operator CME Group is to launch bitcoin futures.

"The move by such a well-known, established exchange throws open the doors for institutions to get into bitcoin," said analyst Arnaud Masset at Swissquote, a brokerage that offers bitcoin trading to retail clients.

"Still, traditional investors will remain cautious and will not rush."

Thursday's price move took bitcoin's aggregate value or "market cap" -- its price multiplied by the number of bitcoins released into circulation -- to more than $122 billion, according to industry website Coinmarketcap.

The aggregate value of all cryptocurrencies hit a record high of more than $194 billion, the website said, more than the market values of Goldman Sachs and Morgan Stanley combined.

"This has been another incredibly bullish week for the cryptocurrency, with the visible upside attracting investors from all directions," said Lukman Otunuga, research analyst at FXTM, a brokerage.

"It must be kept in mind that bitcoin’s exponential gains are not only phenomenal, but (also) somewhat frightening."

source: news.abs-cbn.com

New digital piggy bank helps Swiss kids save

ZURICH - In Switzerland, one of the world's wealthiest countries, financial planning starts young.

The country's number two bank Credit Suisse on Tuesday unveiled a piggy bank with built-in apps allowing children under 12 to set savings goals, check their balance and make payments.

"The financial education of children is a concern to people in Switzerland," Credit Suisse said in a statement, citing a recent study showing that 90 percent of parents in the wealthy Alpine nation want their children to learn how to handle money.

The study, conducted by the amPuls market research firm on behalf of Credit Suisse, also found that most children in Switzerland not only receive pocket money but "are frugal with it".

According to the research, Swiss parents have asked questions about how to teach children about money when it increasingly exists in digital form instead of coins and notes that can be stored in an old-fashioned piggy bank.

Named Viva Kids, the piggy bank "provides a wide range of options for teaching kids in a simple way how cash and digital money work and how to use them," Credit Suisse said.

source: news.abs-cbn.com

PH shares too expensive - Credit Suisse

MANILA - Credit Suisse on Wednesday said Philippine shares are still too expensive.

Right now, with the Philippine Stock Exchange index (PSEi) at 7,000, Philippine shares are trading at an average price to earnings ratio of 18 to 19 times, meaning investors are paying roughly 18 times what the company earns per share.

That is one of the most expensive in the region.

Credit Suisse said many investors are waiting for the price-earnings (PE) ratio to fall to 15 times and below.

"You can achieve that drop two ways, either through a price correction or through improved corporate earnings. The one theme over the next six months for the Philippines, I think, and this is where you are going to get positive surprises, is in corporate earnings, whether it be through consumer companies, because I think domestic consumption will remain strong, or through companies that benefit from these low commodity prices," said Robert Parker, senior advisor for investment strategy and research at Credit Suisse.

A local broker estimates the PSEi would need to fall 1,400 points to get to a 15 price earnings ratio--a 20 percent drop.

Counting on rising earnings may be difficult because earnings growth has been mostly disappointing.

COL Financial says two-fifths of the 56 listed companies it covers reported weaker than expected profit in the first half.

Meanwhile, a Philippine broker said the fall in PE doesn't have to be so big, estimating a PE of 16 to 17 would already be attractive. -- ANC

source: www.abs-cbnnews.com