Shocked Credit Suisse staff in Singapore, Hong Kong fret about retrenchments

SINGAPORE/HONG KONG – Credit Suisse staff arriving to work in Hong Kong and Singapore on Monday (March 20) morning fretted about retrenchments and retaining business after Swiss rival UBS agreed to swallow the 167-year-old bank in a state-backed rescue.

Late on Sunday, the Swiss authorities capped a tense week of markets by engineering a three billion Swiss francs (S$4.34 billion) takeover of Credit Suisse by UBS, 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.

The Straits Times, citing market sources, reported that Credit Suisse employs roughly 3,500 people in Singapore.

Even before Credit Suisse’s government-brokered takeover, the bank was in the process of cutting 9,000 jobs globally in an effort to save itself.

The forced merger with UBS creates significant overlaps. The two lenders together employed almost 125,000 people at the end of last year, with about 30 per cent of the total in Switzerland.

Even before Credit Suisse’s government-brokered takeover, the bank was in the process of cutting 9,000 jobs globally in an effort to save itself.

Credit Suisse told staff in an internal memo it will work to identify which roles might be impacted, and “will aim to continue to provide severance in line with market practice.” There will be no changes to payroll arrangements and bonuses will still be paid on March 24, the memo said.

UBS chairman Colm Kelleher said on Sunday it’s too soon to know a job-cut number, but UBS indicated it will be significant. The bank plans to cut the combined company’s annual cost base by more than US$8 billion (S$10.7 billion) by 2027. That’s almost half of Credit Suisse’s expenses last year.

Credit Suisse had been steadily losing wealth management market share to UBS and to more well-capitalised US 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, who like other staff spoke to Reuters on condition of anonymity.

Credit Suisse 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.

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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.

In Hong Kong, Credit Suisse said it would still press ahead with its annual investment conference that kicks off on Tuesday, although media are no longer invited.

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

“I don’t know if I get to stay, leave, or should I consider my options now?” said one South-east Asia-based banker, who also complained of pressure from clients to provide answers within 24 hours to questions about the UBS deal.