21st March 2023 – (Hong Kong) UBS has rescued Credit Suisse for US$3.2 billion, which could put thousands of jobs at risk, particularly in Asia, as the bank aims to reduce the new combined company’s annual cost base by US$8 billion over the next four years.
UBS plans to downsize Credit Suisse’s investment banking business and align it with their conservative risk culture. The two banks have significant overlap in their investment banking and wealth management businesses and are Switzerland’s two largest lenders, employing nearly 125,000 people as of the end of 2022, including about 23,000 in Asia.
Some experts estimate that 2,000 jobs are at risk, particularly in risky investment banking businesses at Credit Suisse, which is partially responsible for the bank’s problems. The US Federal Reserve, the Bank of England, the European Central Bank, the Swiss National Bank, the Bank of Canada, and the Bank of Japan joined forces to prevent the Credit Suisse crisis from leading to contagion in other parts of the banking sector. The merger of this sort is inevitable and will result in further job losses, mostly concentrated in the risky investment banking business at Credit Suisse, which is partly the cause of the problems that the firm is experiencing, and in middle, back office, technology, and operational roles. The takeover saves Credit Suisse for now, but staff are worried about their futures.