Stunned Credit Suisse staff fear uncertain future despite UBS rescue deal
CREDIT Suisse staff arriving at work in Asian financial centres on Monday (Mar 20) morning fretted about retrenchments and retaining business, after larger Swiss rival UBS agreed to swallow the 167-year-old bank in a state-backed rescue.
“I don’t know if I get to stay, leave, or should I consider my options now?” said one South-east Asia-based banker, who, like other staff who spoke to Reuters, requested anonymity.
The banker also complained of pressure from clients to provide answers to questions about the UBS deal within 24 hours.
Late on Sunday, Swiss authorities capped a tense week for markets by engineering a three billion Swiss franc (S$4.3 billion) takeover of Credit Suisse by UBS, supported by billions in state funding, while angering holders of risky bonds by writing down debts to zero.
Credit Suisse employs 50,000 people globally across wealth management, investment banking and asset management operations, with more than 150 offices in 50 countries.
In the last few years, it had been steadily losing wealth management market share to UBS, and trailing better-capitalised US banks in investment banking, but it remained the second-biggest wealth manager in Asia, behind only its acquirer.
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“It’s an extremely sad day to see us ending our legacy this way,” said one Singapore-based senior employee in Credit Suisse’s wealth management unit.
The bank told staff its wealth assets are operationally separate from UBS for now, but once they merged, clients might want to consider moving some assets to another bank if concentration was a concern, an internal memo showed.
Credit Suisse said it would still press ahead with its annual investment conference that kicks off in Hong Kong on Tuesday, although media are no longer invited. It added that its chairman and chief executive would not turn up at the event.
“I have no idea what it means to still continue ‘business as usual’ when we’re not even sure our job is going to be there,” said one Hong Kong-based employee.
Credit Suisse shares plunged 60 per cent in early trade on Monday, while UBS lost 15 per cent, as investor optimism about official efforts to stem a banking crisis quickly evaporated.
Outside Credit Suisse’s office near Singapore’s central business district, nearby coffee shops, usually bustling with bankers from the Swiss bank and its rivals, were less crowded on Monday morning.
Some of the bank’s employees brushed aside questions from journalists waiting outside the office lobby.
UBS on Sunday warned that it would pare back much of Credit Suisse’s investment bank, which the latter had planned to spin off.
The Swiss Bank Employees Association on Monday called on UBS to keep job cuts to an “absolute minimum”.
UBS and Credit Suisse sources said South-east Asia was among the regions where the banks had the most overlap in the wealth management and investment banking teams.
“Investment banking stands out and that could be where the pain is felt most for Credit Suisse,” a senior executive at UBS said.
Credit Suisse is ranked 20th on the league tables for equity capital markets for the first quarter in Asia-Pacific including Japan, Refinitiv data showed, with a 1.1 per cent market share.
Still, it remains a powerful equity capital markets entity in South-east Asia’s growing markets, occupying the second spot with a 9.3 per cent market share, up from 3.2 per cent a year earlier. REUTERS
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