UBS to cut up to 30% of enlarged staff force
THE bank created by the UBS takeover of Credit Suisse is poised to reduce its workforce by 20 per cent to 30 per cent, Swiss daily Tages-Anzeiger reported on Sunday (Apr 2), citing an unnamed senior UBS manager.
UBS agreed to buy Zurich rival Credit Suisse for three billion Swiss francs (S$4.4 billion) in a deal engineered by the Swiss government, the central bank and market regulator to avoid a meltdown in the country’s financial system.
But the deal, which was also designed to help to secure financial stability globally, has raised concerns over the size of a new bank with US$1.6 trillion in assets and more than 120,000 staff worldwide.
The report said the bank could cut about 11,000 jobs in Switzerland.
Jobs in its US investment banking arm will also be affected, the report said, with UBS set for talks to terminate a deal that would have given Wall Street dealmaker Michael Klein control of much of Credit Suisse’s investment bank.
Separately, incoming UBS chief executive Sergio Ermotti has sought to ease worries about the size of the new bank being created by its takeover of Credit Suisse.
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“Even putting UBS and Credit Suisse together, we won’t be at the top of the classification for international banks in terms of size,” Ermotti said in an interview with Italian business daily Il Sole 24 Ore.
“We have a good position thanks to our activities, and our greater critical mass at a global level will certainly give us another advantage. The question of excessive size does not arise,” added Ermotti, who is Swiss but an Italian speaker.
Ermotti, who was previously chief executive of UBS from 2011 to 2020 and is now chairman of insurance group Swiss Re, will take the helm at the bank from Apr 5.
He indicated that the combined bank would stick to the successful UBS strategy. “I maintain that the model should be that of the current UBS whose core features include a central role for wealth management activity and the containment of investment banking and its related risks,” he added.
In Switzerland, the public and politicians have also voiced concerns about the level of state support for the banks, with nearly 260 billion Swiss francs in liquidity and guarantees offered by the government and Swiss National Bank. “If you look at the full framework for the acquisition, I think you can say that the guarantees from the National Bank and Confederation are reasonable,” Ermotti said.
Further, Norges Bank Investment Management said on its website that it will vote against the re-election of Credit Suisse chair Axel Lehmann and six other directors at the Swiss lender’s annual general meeting on Tuesday.
“Shareholders should have the right to seek changes to the board when it does not act in their best interest,” the Norwegian wealth fund said ahead of the meeting. The fund is also opposing re-election of Credit Suisse directors Iris Bohnet, Christian Gellerstad, Shan Li, Seraina Macia, Richard Meddings and Ana Pessoa.
Credit Suisse had also encountered opposition from proxy adviser Institutional Shareholder Services, which had recommended that shareholders vote against a proposal by the bank for its board and senior management to be released from liability for its 2022 financial results, as it cited a “lack of oversight and poor stewardship” that ultimately led to the problems that necessitated its rescue by UBS. REUTERS
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