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There are fears of heavy job losses as the dust settles after the rescue of Credit Suisse by UBS.
The shotgun wedding hammered out between the two Swiss banks last weekend will create a 120,000 strong financial institution and it already seems inevitable that the workforce will shrink.
Switzerland s financial sector is already anticipating a heavy hit from the contentious takeover, with the Swiss Bank Employees Association warning yesterday that the jobs of very many employees are at stake. The Financial Times reports that Credit Suisse's domestic business and its investment bank, which collectively employ more than 30,000 employees, are expected to bear the brunt of the cuts.
As much as a third of the 120,000 jobs in the combined group could be at risk, according to people familiar with the plan, as UBS winds down much of the investment bank and removes overlapping roles in Switzerland.
Credit Suisse, which employed just over 50,000 people at the end of 2022, is currently in the middle of a wide-ranging job-cutting drive, with 4,000 positions slashed so far this year. It is expected that the takeover will result in many of the 17,000 investment bankers losing their jobs as UBS winds down most of the unit.
On Sunday night, UBS chairman Colm Kelleher stated that he plans to run down the investment banking part of Credit Suisse. UBS has a more risky asset management model, which is more focused on asset management.
Kelleher who apparently squeezed in a beer at the James Joyce pub during the weekend negotiations to rescue Credit Suisse said on Sunday evening that it was too early to say what would happen with job cuts.
Mark Yallop, the former chief executive of UBS in the UK, said he thinks job losses will be inevitable. He told Radio 4 s Today programme on Monday that they will probably be concentrated in Credit Suisse's investment banking business, and in middle-office, technology and operational roles.
Some bankers of Credit Suisse aren't planning to hang around and see the axe fall.
Over the past few days, the Headhunters and rival lenders from Singapore to London to New York have been receiving calls from anxious Credit Suisse staff, Bloomberg said.
One firm in Singapore handled questions from some 30 mostly Credit Suisse private bankers about available jobs on Monday, while another recruiter in Hong Kong has been talking to more than 20 senior investment bankers since last week, asking not to be identified as discussing confidential information. A firm that specializing in managing director hires said it received such calls since late Friday, especially for the wealth area.
The financial markets seem calmer today after a volatile session on Monday. Europe's main stock market indexes are expected to rise this morning.
Some Credit Suisse bond holders were wiped out while shareholders received a payment, which inturned the usual order of business.
The markets were calmed by the UK and European officials, who said they would stick to the usual heirachy.