For Credit Suisse, the relationship with Chinese billionaire Lu Zhengyao is becoming a mortgage. Now the big bank is trying to gain access to the Chinese family’s wealth.
This is how a relationship can change: First was between the Swiss bank Credit Suisse and the Chinese billionaire Lu Zhengyao everything in perfect order. The bank courted the “dream customer” of the former CS CEO Tidjane Thiam and owner of the Chinese Starbucks counterpart Luckin Coffee, took him out to eat countless times, all in perfect order.
Even if private banking as well as the big bank’s investment bank wanted to earn a golden nose from him, Zhengyao is now rid of a large part of his assets. This was after his company admitted to falsifying the books and posting imaginary sales of $ 310 million, which is about 40 percent of annual sales. As a result, the company’s stock sank almost 92 percent.
100 million dollars probably gone
And that becomes a problem for the CS: It had to massively increase the provisions for foreseeable loan defaults because on the one hand it granted the billionaire personally, and on the other hand Luckin Coffee covered Lombard loans with shares, in the case of Lu itself around 100 million dollars.
The bank now wants it back, as the American news agency “Bloomberg” reports. Together with other lenders, it has applied for a court order to liquidate Haode Investment, which is owned by Lu’s Familien-Trust and was unable to repay a loan secured with Luckin shares.
Lu’s investment vehicle denied that it was in default of payment – and therefore requested an injunction against Credit Suisse in Hong Kong to prevent the bank from initiating liquidation proceedings.
Will UBS and Credit Suisse merge after the Corona crisis?
Yes, because they will not be able to bear their high costs on their own.
Yes, there will be cooperation in some areas.
UBS will swallow Credit Suisse.
Credit Suisse will swallow UBS.
No, both banks will still be independent in five years.