The implications of UBS’s takeover of Credit Suisse last month is continuing to roil the Swiss financial space, according to reports throughout the country’s media.
UBS will look to shed between 25,000 and 36,000 roles within the company, with 11,000 of those being in Switzerland, Sonntags Zeitung has reported. The newspaper went on to note that insiders had told it this would be the result of targeted cuts in personnel of between 20% and 30%. These would be on top of cuts that have already happened at Credit Suisse in recent years that the paper said would only deepen.
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More trouble may be brewing elsewhere – as TIME wrote earlier this week, prosecutors in Switzerland are looking to “identify possible crimes”. A statement from the prosecutor, as reported by Bloomberg, said: “In view of the relevance of the events, [the federal prosecutor] intends to proactively fulfil its mandate and responsibility to contribute to a clean Swiss financial centre and has set up a monitoring system in order to take immediate action in the event of any circumstances that fall within its jurisdiction.”
As yet, there is no clue as to what financial crimes – if any – may have been committed, but Bloomberg noted Swiss newspaper NZZ am Sonntag had previously speculated the investigation might focus on who could have passed on information about the takeover before it was completed.
Separation of powers
A senior banking commentator further dampened spirits by suggesting to German news magazine Spiegel the odds were stacked against the merger succeeding. Arturo Bris, professor of finance and director of the IMD World Competitiveness Center in Lausanne and Singapore, said: “Mergers between established banks such as UBS and Credit Suisse, which are no longer growing fast and are less profitable than their competitors, almost never work.” He added the only benefit would be cost savings, making the case the two banks should be clearly separated.
Bris also took to CNBC to talk about the situation, observing: “My perception would be that, if the Swiss national bank and the Swiss regulator manage to keep these two entities somehow separated under the same umbrella but operating in Switzerland and trying to cooperate with each other, this will be good for Swiss customers and also for the reputation of Switzerland as a financial centre.”