Credit Suisse’s Banker to Russian Billionaires Retained by UBS

Credit Suisse’s go-to banker for Russian billionaires has been retained by UBS Group AG, in one of the highest-profile moves yet for the merged bank’s wealth management business.

(Bloomberg) — Credit Suisse’s go-to banker for Russian billionaires has been retained by UBS Group AG, in one of the highest-profile moves yet for the merged bank’s wealth management business.  

Babak Dastmaltschi is working at a new unit in UBS’s wealth division that regroups an elite crop of senior private bankers from both UBS and Credit Suisse who handle some of the most important client relationships, according to people familiar with the matter who didn’t want to be named discussing personnel decisions. 

The unit, called GWM Strategic Clients, is run by Benjamin Cavalli, another Credit Suisse import, who reports directly to the head of UBS’s global wealth unit, Iqbal Khan. UBS’s former head for the Middle East, Ali Janoudi, also joined the group as an executive chairman. Dastmaltschi will hold an executive vice chair title, the people said. 

Dastmaltschi did not respond to an emailed request for comment. UBS declined to comment. 

UBS is trying to retain many of Credit Suisse’s most senior wealth bankers along with the client relationships they oversee. But the decision to bring Dastmaltschi on board, who made his name in private banking by catering to tycoons emerging from the collapse of the Soviet Union, may raise eyebrows. UBS and Credit Suisse are among a clutch of banks facing US Department of Justice investigations into alleged breach of sanctions on Russian individuals.  

Both banks completely shut down their Russia-related operations after more sanctions were imposed in February 2022 over Russia’s invasion of Ukraine. 

Abramovich, Usmanov

Dastmaltschi was for many years at Credit Suisse the go-to guy for some of the most prominent oligarchs deemed to be close to the Kremlin who were later sanctioned, including Alisher Usmanov, Roman Abramovich and Viktor Vekselberg. Abramovich also tapped him to help with his ultimately unsuccessful bid to secure residence in the exclusive Swiss ski resort of Verbier.

Later from 2014, when doing business with Russia became increasingly laced with pitfalls and sanctions imposed after Russia’s annexation of Crimea, Dastmaltschi pivoted his focus to clients in the Middle East and Western Europe. He also became part of the leadership of a strategic team that catered to Credit Suisse’s most important clients. 

Read more: Credit Suisse’s Rich Vein of Russian Money Is Running Dry 

At its peak, Credit Suisse managed more than $60 billion for Russian clients, a number that began dropping after the first sanctions on Russian oligarchs were imposed following the Crimea annexation. By February 2022, the number stood at $33 billion, still 50% more than UBS, despite the latter’s larger wealth management business. 

Hawkish US senators and members of Congress have expressed frustration at what they say is Switzerland’s lukewarm enforcement of sanctions and unwillingness to join its Kleptocapture program designed to implement specifically US sanctions on Russia. Switzerland has been mirroring EU sanctions since the beginning of the war and toward the end of last year said it had frozen about 7.5 billion Swiss francs worth of Russian assets.

Credit Suisse and UBS were among several banks subpoenaed by the US Justice Department on suspicion some of their executives may have helped Russian oligarchs evade sanctions, Bloomberg reported in March. The DOJ is focused on identifying which bank employees dealt with sanctioned clients and how those clients were vetted over the past several years, according to a person familiar with the US probe.

Read more: Credit Suisse, UBS Among Banks in DOJ Russia-Sanctions Probe 

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