It hopes, by this date, more than 10 billion dollars in savings from this merger. The Swiss banking giant UBS has chosen to “fully integrate” the Swiss branch of its ex-rival Credit Suisse, whose brand will disappear, he announced on Thursday August 31, but without immediately revealing the consequences for employment.
The bank, which had to take over its former competitor under the duress of the Swiss authorities to avoid its bankruptcy, wants to complete most of its integration by the end of 2026, said UBS in a press release.
“Two and a half months after the acquisition of Credit Suisse, we are working hard to implement one of the largest and most complex bank mergers in history,” said Sergio Ermotti, the boss. of UBS, quoted in the press release.
UBS opts for integration
The fate of the Swiss branch of Credit Suisse, a thorny issue in the Alpine country in the run-up to legislative elections in October, was one of the most complex issues for UBS to decide.
“Our decision regarding Credit Suisse (Suisse) SA follows a thorough assessment of all possible options”, underlined Sergio Ermotti, explaining that the complete integration of this branch of the fallen bank appeared to be “the best solution”.
UBS, which considered up to seven scenarios, finally opted for integration, believing that the Swiss branch of Credit Suisse would have had difficulty finding its place in the banking landscape, UBS said during a point with the press. .
In the second quarter, Switzerland’s leading bank posted a net profit of $29.2 billion, a comparison to the profit of $2.1 billion posted in the second quarter of 2022, as UBS’s results were distorted this year by exceptional elements, she announced Thursday.
Credit Suisse, for its part, suffered a pre-tax loss of 8.9 billion Swiss francs (9.2 billion euros).
Its turnover had only fallen by 5% in 2022
Considered a nugget, the Swiss branch of Credit Suisse combines its retail banking in the Alpine country, its mortgage loans and loans to national companies. This is the branch that had resisted the best in 2022 when Credit Suisse suffered massive withdrawals of capital.
Its turnover had only fallen by 5% in 2022, against a 54% drop in income in investment banking and 30% in wealth management.
But there are many duplicates between the hundreds of Credit Suisse branches and the 200 of UBS across the country, which forced UBS to make a choice. Several options were considered by investors, including that of a split for the bias of an IPO which would have allowed this branch to survive and limit job cuts.
“If there is an integration, there is of course a major restructuring of this activity in Switzerland”, underlined Mr. Venditti, analyst at Vontobel, during an interview with AFP before the publication of the results. .
120,000 employees worldwide at the end of 2022
In total, the two banks together employed around 120,000 people worldwide at the end of 2022, including 37,000 in Switzerland. But departures have multiplied since the announcement of their merger.
UBS had agreed in March to buy Credit Suisse under pressure from the Swiss authorities and finalized its takeover in June.
The bank has already started to pay the piper for Credit Suisse by agreeing in July to pay the American central bank and the Bank of England 387 million dollars to settle a fine due for the mismanagement of the American fund Archegos.
In mid-August, UBS had however reassured by announcing that it was renouncing the support measures of the Swiss State and central bank, considering that they were no longer necessary.
This takeover under duress diametrically changes the fate of UBS, which in 2022 had generated a copious net profit of 7.6 billion dollars, one of its best results since the financial crisis of 2008, against a colossal loss of 7.3 billion francs for Credit Suisse.