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Stunned Credit Suisse staff fear uncertain future despite UBS rescue deal

By:
Reuters
Updated: Mar 20, 2023, 12:20 GMT+00:00

By Yantoultra Ngui, Summer Zhen and Selena Li

Credit Suisse office in Hong Kong

By Yantoultra Ngui, Summer Zhen and Selena Li

SINGAPORE/HONG KONG (Reuters) – Credit Suisse staff arriving to work in Asian financial centres on Monday 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 Southeast Asia-based banker, who like other staff spoke to Reuters on condition of anonymity.

The banker also complained of pressure from clients to provide answers within 24 hours to questions about the UBS deal.

Late on Sunday, Swiss authorities capped a tense week of markets by engineering a 3 billion Swiss francs ($3.24 billion)takeover of Credit Suisse by UBS, supported by billions in state funding, while angering holders of risky bonds by writing down their debt 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.

Credit Suisse had been steadily losing wealth management market share to UBS and to more well-capitalised U.S. banks in investment banking in the last few years, but remained the second-biggest wealth manager in Asia, behind only its acquirer.

“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, according to an internal memo.

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.

“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.

As a giant wall backdrop as high as the ceiling with “Credit Suisse AIC” emblazed on it glowed in a hotel lobby, the bank said its chairman and CEO would not turn up at the event.

Credit Suisse shares plunged 60% in early trade on Monday, while UBS lost 15%, as early investor optimism about official efforts to stem a banking crisis quickly evaporated.

Outside its office near Singapore’s central business district, nearby coffee shops, usually bustling with bankers from Credit Suisse and rivals, were less crowded early on Monday.

Some of the bank’s employees brushed aside questions from Reuters journalists waiting outside the office lobby.

UBS warned on Sunday that it would pare back much of Credit Suisse’s investment bank, which Credit Suisse 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 Southeast Asia was among the regions where the banks had the most overlap on 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, according to data from Refinitiv, with a 1.1% market share.

Still, it remains a powerful equity capital markets entity in Southeast Asia’s growing markets and shares the second spot with a 9.3% market share, up from 3.2% a year earlier.

($1 = 0.9257 Swiss francs)

(Reporting by Yantoultra Ngui, Anshuman Daga, Summer Zhen and Selena Li; Additional reporting by Scott Murdoch and Xinghui Kok; Writing by Anshuman Daga; Editing by Jamie Freed)

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