According to people familiar with the bank’s operations, UBS is attempting to draw clients by offering above-market rates on deposits as it looks to increase inflows after acquiring struggling rival Credit Suisse.

According to one of the sources who asked to remain anonymous because the topic is private, clients who deposit money with Credit Suisse, now a division of UBS, earn about 1.8% on 50,000 Swiss francs ($54,000) or more held for three months.

Similar deposits with a minimum investment of 100,000 francs earn 1.34% interest at Zuercher Kantonalbank and 1.2% interest at Raiffeisen, according to spokespeople for the two banks.

“As is common in the market, there may be specifically tailored offers that can also depend on an overall client relationship,” Credit Suisse said in response to a request for comment.

Regarding three-month deposit rates, UBS declined to comment. The bank is now running a campaign that offers a fixed rate of 1.75% for a one-year lockup.

Due to a customer money flight that put Credit Suisse in danger of failing, two worldwide systemically important banks merged for the first time ever.

UBS, which manages $5.5 trillion in assets for affluent clients since taking over its erstwhile rival, must win back the clients’ cash and trust in Switzerland. Additionally, the bank needs to make an effort to keep customers who would have had money in both banks and may now be looking to spread their risk.

According to information from the Swiss National Bank, in 2022, the two banks owned 26% of all deposits in Switzerland.

In a report published on Monday, JPMorgan analyst Kian Abouhossein flagged outflows from Credit Suisse’s wealth management division as a significant concern for UBS.

According to the analyst, Credit Suisse may be using higher deposit rates to control cash withdrawals, which has hampered the bank’s capacity to increase income.

Yet, according to Abouhossein, there is a chance that UBS will be able to recoup some of the over $500 billion in deposits and other assets that have left Credit Suisse during the past two years.

In the second quarter, Credit Suisse recorded net asset outflows of 39 billion francs. While Credit Suisse reported net deposit inflows of $18 billion in the second quarter, UBS claimed that the withdrawals had slowed and reversed in June.

Sergio Ermotti, Chief Executive Officer of UBS, has stated his intention to reclaim the assets of Credit Suisse.

“Winning back is winning back and is resetting our starting moment, and then from there on we are going to look at our combined growth aspirations,” Ermotti said at a conference in September.

(Adapted from BusinessTimes.com.sg)