As the dust slowly settles on the weekend’s Credit Suisse and UBS forced union, the shape of jobs at Credit Suisse under its new owner is becoming apparent. It doesn’t look entirely alluring.
Following UBS’s admission that Credit Suisse sales and trading jobs will be moved into a non-core unit and CH6bn of purely costs will be cut, with the bulk of them being cut at Credit Suisse, the Financial Times says tens of thousands of jobs are at risk. These include jobs at Credit Suisse’s domestic business, but they also include the investment bank. Up to 40,000 jobs could go in total by the time the deal is fully completed at the end of the year.
While jobs in the markets division are most at risk, the FT says Credit Suisse’s investment bankers – who were supposed to be moving to CS First Boston with Michael Klein probably won’t do so now. Business Insider reports that the expectation is that CS First Boston is no more. The Financial Times says Klein’s plan is being reviewed and could be cancelled. However, UBS might still want Klein himself along with others in Credit Suisse’s US investment banking team – including its tech investment bankers in particular – who are seen as accretive to its business in America.
There are positive indications, too, that Credit Suisse’s wealth managers might be saved. – Reuters reports that Credit Suisse is contemplating giving them “financial sweeteners” as a token of its affection and that Iqbal Khan, UBS’s president for global wealth management and Francesco de Ferrari, Credit Suisse’s CEO for wealth management, have been out there telling staff that the two banks will all be acting as a “big family,”
When it comes to compensation, the good news is that Credit Suisse bonuses will indeed still be paid in late March, that salary increases will still happen as expected in April and that bonuses will still be accrued for 2023. The bad news is that the cash bonuses paid by Credit Suisse over the last two years will still be clawed back if anyone attempts to leave and that unvested Credit Suisse stock is being converted into UBS stock at the rate of one Credit Suisse share for 22.48 shares in UBS – or CHF0.50 a share valued in Credit Suisse’s own stock. This means that Credit Suisse bankers and traders will collectively lose around CHF300m in unvested stock…
Separately, a female banker has successfully sued a bank for giving her job to someone else while she went on maternity leave.
Jagruti Rajput has reportedly won £300k after a long court battle with Commerzbank and a ruling that substantial parts of her job as deputy head of markets compliance were given to someone else while she was on leave in 2015. Without the discrimination, the court said there was a strong chance she would have been promoted to head of markets compliance. A male colleague was treated as more senior to hire, despite being more junior, and she was discouraged from attending a quarterly review meeting while she was on leave because of assumptions about appropriate behaviour for new mothers.
The Saudi’s $1.5bn investment in Credit Suisse was supposed to be their splashy entrance into banking. Some executives in the Saudi fund thought it was too risky but they were overruled by Crown Prince Mohammed bin Salman. (WSJ)
Credit Suisse AT1 bondholders are talking to lawyers about getting some of their money back. (Reuters)
“AT1 holders were sacrificed so the finance ministry could try to save some face with international equity holders after denying them a vote on either side of the transaction.” (Financial Times)
In the Credit Suisse case, bondholders are helping to bail out shareholders. Equity investors are getting about $3.2 billion of value, while equity-like capital AT1 bondholders get zero. (Bloomberg)
Goldman Sachs is preparing to trade AT1 bonds for people who think they might be able to recover some value from the asset class. (Bloomberg)
UBS chairman Colm Kelleher planned to celebrate St Patrick’s Day on Friday before watching Ireland play England at rugby on Saturday at a pub in Zurich. Those plans were cancelled and he found himself calling Credit Suisse from outside a Zurich restaurant and offering them CHF0.25 a share. (Financial Times)
The memo Credit Suisse sent to staff: “It remains critically important that you continue to come to the office or work according to your agreed pattern.” (Bloomberg)
I’ve cried twice in my career. One during my first week in investment banking when I thought ‘what the hell have I let myself into’, and once today.” (Financial News)
Financial sponsors banker Maksim “Maks” Rodzinek agreed to leave Credit Suisse and join UBS just before the chaos erupted. (Bloomberg)
UBS seems to be assuming Credit Suisse’s legal risks, which could be substantial. (FiNews)
JPMorgan CEO Jamie Dimon has been leading discussions about stabilizing First Republic Bank. (WSJ)
US banks have limited exposure to Credit Suisse because they reduced their exposure in recent months, and see the Swiss bank’s problems as unrelated to US regional banks’ troubles. (Financial Times)
JPMorgan’s most senior infrastructure banker, Anand Narayan, is leaving. (Bloomberg)
Amidst fears of a bank run in Hong Kong in the 1980s, people gathered under an awning by a bus stop to take shelter from the rain. The awning was outside a bank. Other people thought it was a bank run and it became a self-fulfilling prophecy. (Financial Times)
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