Credit Suisse is selling the trust business, it wants a break with the past

A logo is seen on Credit Suisse Bank in Geneva, Switzerland, June 9, 2022. REUTERS/Denis Balibouse/File photo

ZURICH, Sept 6 (Reuters) – Credit Suisse Group ( CSGN.S ) is selling its global trust business, its offshore arm for wealthy clients, as it overhauls the business following a series of scandals.

The sale was announced as the Swiss bank defends its trust arm in Singapore against claims for billions of dollars and more in damages.

Credit Suisse said it would sell its Singapore fiduciary operations, along with others, and liquidate legal entities and “residual businesses” in the coming years.

Credit Suisse has dubbed 2022 a “transitional” year for a change in custody, as it faces speculation that it could restructure to deal with risk, buy out or break up.

Ulrich Koerner, a 59-year-old reformer, was appointed chief executive by Thomas Gottstein in August, two years after a tumultuous and unusual court conviction for a bank in Switzerland that saw its shares fall 40%.

This week, Georgia’s former prime minister, Bidzina Ivanishvili, sued Credit Suisse’s trust unit in a Singapore court for failing to take steps to prevent it from losing $1.27 billion.

Ivanishvili accused Singapore-based Credit Suisse Trust of failing to protect its investments and “taking inadequate measures” to prevent losses linked to fraud by former Geneva banker Patrice Lescadron.

The trust department asked the court to dismiss the claim, saying it was “extremely serious”.

Lescadron was a Credit Suisse “conduit” for Ivanishvili’s business and began “fraudulently” managing the trust’s investments and “distorting” the trust fund in 2007, according to Ivanishvili’s lawyer.

Lescadron was convicted in a Swiss court in 2018 of forging the signatures of former clients, including Ivanishvili, over an eight-year period. Lescadron then took his own life.

Credit Suisse will sell most of its trust business in Guernsey, Singapore and the Bahamas to bank NT Butterfield & Son Limited ( NTB.N ), while Gasir Partner Trust will take over the Liechtenstein business.

Some entities remain with Credit Suisse for a few customers. The bank declined further comment.

Reporting by Michael Shields; Writing by John O’Donnell; Edited by Louise Havens, Robert Birsle

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