(Bloomberg) -- Credit Suisse Group AG may need to find new ways to serve clients who generate as much as $750 million of revenue at its U.K. subsidiaries after Britain leaves the European Union, Chief Financial Officer David Mathers said.
Losing access to European markets would endanger 10 percent to 15 percent of income at the two units, which have a revenue base of $4 billion to $5 billion, Mathers said in an interview this week in Zurich. International companies that don’t depend on so-called passporting to do business with Credit Suisse account for most of the overall revenue there.
“In the event of a ‘hard Brexit,’ with no passporting and no negotiated equivalent regime,” that’s what would be “at risk,” Mathers said. “We are looking at options with the EU-27 nations to protect the service we offer to our clients in these countries.”
Banks have struggled to quantify Brexit risks to their business because so many unknowns surround Britain’s future relationship with the EU. At stake is the right of companies based in Britain, home to Europe’s biggest financial center, to sell products and services in the rest of the EU.
Read next: A look at passporting and Brexit
Credit Suisse set up a group to study the possibility of Brexit a year before the June vote. Mathers, 51, the only Briton on the executive board, is also chief executive officer of the U.K. entities, CS International and CS Securities (Europe) Ltd.
With Britain’s departure scheduled for 2019, at least half a dozen European cities are courting banks for business displaced by Brexit. Stuart Gulliver, chief executive officer of HSBC Holdings Plc, said last month that it might make Paris the future home for trading operations that generate about 20 percent of revenue for the lender’s investment bank in London.
For Credit Suisse, the options include Dublin, where the bank is said to be expanding, and Luxembourg, a hub for private banking. It also has a full set of licenses in Frankfurt.
The Zurich-based bank was scaling back in London well before the U.K. referendum as part of a strategic shift away from investment banking, Credit Suisse’s main business in Britain. Headcount fell to 6,500 last year from 9,265 in November 2015, when Chief Executive Officer Tidjane Thiam began restructuring the company to focus on wealth management. The bank may slash another 1,500 jobs in Britain this year, mainly contractors and consultants, Mathers said, to end the so-called London program at around 5,000 staff.
Swiss competitor UBS Group AG is already building up its presence in the EU. The bank recently merged its European wealth management operations into a new subsidiary in Frankfurt. It is considering moving investment bankers from London to Madrid, a person with knowledge of the matter said last month.
For Swiss banks, Brexit has served as a refresher on the whims of voters. Switzerland routinely uses plebiscites to decide matters big and small, including one in 2001 when it rejected a bid to join the EU. Instead it has carved out about 120 agreements that taken together still only grant the country partial access to the single market. Financial services aren’t included.
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