UBS to cut 3,000 jobs in Switzerland after Credit Suisse merger

AFP - [email protected]
UBS to cut 3,000 jobs in Switzerland after Credit Suisse merger
UBS CEO Sergio Ermotti leaves a press conference in Zurich on March 29, 2023. Photo by: ARND WIEGMANN / AFP

Banking giant UBS said Thursday that its merger with former rival Credit Suisse and full absorbtion of its Swiss unit would result in 3,000 job cuts in Switzerland in the coming years.


"Around 1,000 redundancies will result from the integration of Credit Suisse Schweiz," UBS chief executive Sergio Ermotti said in a conference call with analysts on Thursday, adding the overall restructuring was "expected to lead to about 2,000 additional redundancies in Switzerland over the next couple of years".

UBS said it would fully absorb the Swiss unit of Credit Suisse into its operations.

Switzerland's largest bank, which was strongarmed into a $3.25-billion takeover of its closest domestic rival in March to keep it from going under, said it aimed to complete most of the integration by the end of 2026, and was eying more than $10 billion in cost savings by then.

"Two and a half months since closing the Credit Suisse acquisition, we are wasting no time in delivering value for all our stakeholders from one of the biggest and most complex bank mergers in history," Ermotti said.

The announcement came as UBS posted its second-quarter income statement, presenting its first results since the mega-merger that rocked Swiss banking was finalised in June.

The results were strong for UBS, which posted a towering net profit of $29.2 billion. Credit Suisse took a $10.1 billion loss over the same period.

READ ALSO: UBS merger with Credit Suisse raises jobs fears in Switzerland

'Full integration'

Credit Suisse had been plagued by scandals prior to the takeover, which was precipitated by fears that a crisis in regional US banks would cross the Atlantic.

Investors and employees alike have been eager for any clues as to the fate of Credit Suisse's Swiss division, with questions over whether it could continue to operate independently due to the significant overlap with UBS's business in Switzerland.

The answer was no.

"Our analysis clearly shows that full integration is the best outcome for UBS, our stakeholders and the Swiss economy," Ermotti said.

"Our goal is to make the transition for clients as smooth as possible," he said.


"The two Swiss entities will operate separately until their planned legal integration for 2024 with the gradual migration of clients onto UBS systems expected to be completed in 2025."

The combined banks jointly counted around 120,000 staff worldwide at the end of 2022, including 37,000 in Switzerland.

Credit Suisse suffers $10 billion loss

Even before the results were released, it was obvious the merger combined two banks pulling in diametrically different directions.

While Credit Suisse in recent years has been racking up towering losses, posting a massive 7.3-billion Swiss franc ($8.3 billion) net loss in 2022, UBS posted a $7.6 billion net profit.

And Thursday's announcement showed that Credit Suisse's woes had continued to pile up, with the former second largest bank in Switzerland had suffered a pre-tax loss of 8.9 billion Swiss francs ($10.1 billion) in the quarter.

UBS meanwhile has continued to project strength, announcing earlier this month that it does not need the billions in support offered by the Swiss government and the central bank to go through with the takeover.


But its $29.2-billion profit in the second quarter was heavily distorted by the gigantic takeover, which brought with it a string of exceptional items, and was not comparable with the year-ago quarter.

UBS said it was now tasked with cleaning house to smooth the integration.

It has already begun paying for its former rival's mistakes.

In July, it dished out $387 million to cover a fine imposed by the US Federal Reserve and the Bank of England over Credit Suisse's failure to adequately manage the risk posed by the US investment fund Archegos, whose dramatic implosion cost the bank $5.5 billion in losses.

In another apparent sign of looming changes at the investment bank, Credit Suisse sent a letter to investment clients, seen by AFP on Wednesday, indicating it would "reduce its volume of new business from September 22nd", and had begun redirecting its investment clients to UBS for all market activities.


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