GENEVA (AFP)--Credit Suisse (CS) has bought back some collapsed
Lehman Brothers funds from clients for nearly 100 million Swiss
francs ($88 million dollars) after acknowledging that some
customers were overexposed, the Swiss bank said Sunday.
"We made an offer to about 2,000 clients and bought back Lehman
products for nearly CHF100 million," Walter Berchtold, head of
private banking at Credit Suisse, told the NZZ am Sonntag
newspaper. "Only 11 clients turned down this offer."
A spokesman for Switzerland's second biggest bank, Jan Vonder
Muehll, confirmed the amounts to AFP and said the cost was booked
in the 2008 third-quarter accounts.
The buyback offer was only aimed at "capital-protected" Lehman
products Credit Suisse sold to those with less than CHF500,000 at
the bank and 50% or more of those assets invested in such
products.
Vonder Muehll declined to disclose what proportion of clients
who invested in Lehman products were affected by the offer. The
buyback was made at the nominal price of the collapsed funds, he
added.
The bank said overall 0.3% of its clientele had funds invested
with the now bankrupt U.S. bank. Credit Suisse has about one
million customers in Switzerland and 2.5 million worldwide, Vonder
Muehll said.
In the newspaper interview, Berchtold said despite giving advice
about risk, in some instances Credit Suisse assembled "too high a
concentration" of Lehman Brothers products, leading to losses that
were "too great" for certain clients with the U.S. bank's
"unexpected collapse".
"For these (clients) we swiftly found a helpful solution," he
added.
Credit Suisse said just after the Wall Street icon's collapse in
September that it was holding discussions with clients to whom it
had sold Lehman Brothers-backed structured products. But it had
ruled out repaying any losses.
Swiss media reported last year that small local investors were
persuaded by Credit Suisse advisors to put their money in
"capital-guaranteed" Lehman products without being informed that
the funds were only guaranteed by the issuer - Lehman Brothers.
Hong Kong's market watchdog said Friday that a leading local
brokerage had agreed to fully refund a total of 85 million Hong
Kong dollars ($11 million) to 300 investors who bought so-called
minibonds backed by Lehman Brothers, after accusations of
misselling.
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