Credit Suisse bankers fear APAC cull
If Credit Suisse bankers working in investment banking and capital markets in the APAC region were worried about their futures under Michael Klein, their prospects have darkened now that they'll be part of UBS.
UBS talked up the importance of Credit Suisse’s business in South-East Asia when the deal was announced, and sources say it will look to keep firm’s private bank and wealth management operations. But the outlook for the investment banking and capital markets (IBCM) business is bleak, according to multiple sources. “UBS don’t need many of their bankers in the region,” said one source. “There’s significant overlap in China and North Asia. There may be a handful they want in specific locations or product, but they probably don’t need 90% of those bankers.”
At the end of 2021, the last year that Credit Suisse operated a stand-alone Asia Pacific subsidiary, it employed 7,530 people across investment banking, asset management and wealth management. Sources say that it employs around 300 bankers in IBCM in the Asia-Pacific region. Credit Suisse’s Apac financing group has around 20 bankers, while it employs around 35 directors and managing directors across equity capital markets, mergers and acquisitions and corporate finance, according to one insider. It has around 30 bankers in its Singapore IBCM business.
UBS cannot start cutting jobs until the takeover completes, but some bankers are already voting with their feet and jumping before they are pushed. Lim Zi-Kuan, Credit Suisse’s head of M&A for Southeast Asia, resigned on April 3. “He was highly regarded and Credit Suisse wanted to keep him,” said one former colleague. Zi-Kuan has gone to Deutsche Bank,
Credit Suisse has a much bigger presence than UBS in APAC. While UBS may cherry-pick some bankers, it will want to control its cost base and chairman Colm Kelleher has pledged that the investment bank will consume no more than 25% of group risk-weighted assets. “We have a focused investment bank. It is highly competitive in the segments we have chosen to participate in and creates synergies with our other businesses. This has not changed with the acquisition of Credit Suisse,” he said at the bank’s AGM on April 5.
UBS is a rarity among western banks in China by having a profitable onshore business, but its success has come from being lean. Credit Suisse’s China investment banking joint venture employs around 40 people.
The outlook may be uncertain for Credit Suisse’s corporate financiers in APAC, but Kelleher restated his commitment to wealth management in the region as well as the US. “They are the largest and fastest growing regions in the world, and they have great demand for our world-class services rooted in Swiss expertise. The Credit Suisse transaction is expected to accelerate our strategic plans in this area,” he said at the AGM.
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