UBS CEO hints at big cuts to Credit Suisse’s investment bank
Credit Suisse Group AG may be due for a “massive downsizing” of its investment banking businesses after its takeover by UBS Group AG, Chief Executive Officer Sergio Ermotti said in an article.
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Банку Credit Suisse «подрежут» инвестиционный бизнес?
UBS went through similar steps in Ermotti’s earlier tenure, the CEO wrote in an opinion pieceExternal link in Swiss newspaper Tages-Anzeiger on Saturday. He also said that the firm had simplified its structure and that a “prudent corporate culture” is at the core of everything they do.
“These strategic adjustments, which we will now also implement for Credit Suisse, will reduce the risks of the combined bank for Switzerland,” he added.
The fusion of the two financial giants is underway after the takeover was formally closed on Monday, almost three months after the Swiss government brokered the $3 billion (CHF2.7 billion) deal as Credit Suisse headed for collapse. UBS executives including Chairman Colm Kelleher have made clear that remaining Credit Suisse bankers would be put through a “culture filter” to weed out undesirable practices from the acquired bank.
Ermotti has declined to comment on figures for potential job cuts, saying earlier this month “that’s the toughest part of the task,” though it’s needed to reduce costs. He said on Monday that about 10% of Credit Suisse employees had left the bank in the past few months.
“The task ahead is demanding and takes time, and difficult decisions must be made,” he wrote on Saturday. “It requires focus, humility and open communication.”
Ermotti also wrote that “the question of what will happen to Credit Suisse’s Swiss business warrants careful consideration.”
Originally, UBS planned to fully integrate the local unit but later backtracked, with Ermotti saying that all options were on the table, including sale or spinoff. UBS said it would make a decision in the third quarter of this year.
Touching on the political debate which the takeover spurred in Switzerland – including a historic probe by parliament – Ermotti wrote that “while there are important lessons to be learned from the recent crisis, we should refrain from quick fixes”.
He said that he supports a “360-degree investigation” into which parts of banking regulation worked and which didn’t, but added “confidence and profitability cannot be brought about by regulation”.
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