The chairman of UBS has warned of ‘hard cuts’ facing investment bankers from Credit Suisse – setting the scene for thousands of job losses in the UK.
Colm Kelleher acknowledged it was inevitable the London workforce would shrink as the two banks, which together employed around 11,000 in the capital before they merged, prepare to move into a single HQ.
He was unable to say, when asked on the sidelines of the FT’s global banking summit, how many jobs would go in London amid speculation 35,000 could go worldwide.
But pressed on what would happen in the UK, he told the Mail: ‘The investment bank will feel hard cuts.’
The comments underline expectations that Credit Suiss’s global investment banking operations face being severely pared back, with London facing a big hit.
Cuts: UBS boss Colm Kelleher (pictured) acknowledged it was inevitable the London workforce would shrink as the two banks prepare to move into a single HQ
Credit Suisse was rescued by UBS in March in a deal brokered by the Swiss authorities in a move seen as crucial in preventing a wider meltdown in the banking industry.
Kelleher made clear at the summit that it was Credit Suisse investment bankers who bore the blame for its difficulties.
He said that after the merger his major fear was that there would be ‘cultural contamination’ but added: ‘That hasn’t worked out to be the case mainly because most of the bad actors left.’
Asked who those were, he said: ‘A lot of the investment bankers from Credit Suisse.’ He added: ‘Credit Suisse would not have been in the position it was in if the investment bank had been allowed to be run properly.’
The combined operations will be based at the UBS base in Broadgate, with the move to one building expected by the end of 2024.
Kelleher told the banking summit the ‘massively complicated’ integration of the two firms had so far ‘over-delivered’.
But it faced a tougher battle sorting out legal entities, IT functions, and data. Reports suggest a relatively small number of jobs have gone in London since UBS rescued Credit Suisse.
The bank was the biggest victim of a crisis that started in the US, when the tech-focused Silicon Valley Bank folded, which was followed by a series of regional lenders.
At the time of the deal, Kelleher said that UBS intended to ‘downsize’ the Credit Suisse investment bank ‘and align it with our conservative risk culture’.
Figures disclosed in September showed that Credit Suisse’s core banking workforce, globally, fell by more than 4,000 in the 12 months to June. In August, UBS said it planned to cut 3,000 jobs in Switzerland alone.
The cuts lined up for Credit Suisse’s old London operations come at a tough time for the City amid a dearth of deal-making, and soul searching over the trend for UK firms to list in New York.