(Bloomberg) — Switzerland’s top prosecutor opened a probe into the takeover of Credit Suisse Group AG by UBS Group AG, while a Swiss newspaper SonntagsZeitung reported that the deal may result in up to 30% of the workforce being cut.
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As many as 11,000 employees will be laid off in Switzerland, and another 25,000 worldwide, the newspaper said, citing an unidentified senior manager at UBS. The two lenders together employed almost 125,000 people at the end of 2022 — about 30% of them in the home country. A spokesperson for UBS declined to comment on the report.
Read More: Credit Suisse’s 9,000 Job Cuts Are Foretaste of UBS Takeover
Switzerland’s Office of the Attorney General separately said Sunday it was working to identify possible crimes linked to the takeover, without specifying further what it was looking for. The top federal prosecutor ordered national and regional authorities to investigate, according to a statement.
Years of scandals at Credit Suisse fueled an accelerated collapse in confidence at Credit Suisse last month that culminated in the government-brokered $3.3 billion takeover by its long-time rival. The deal creates significant overlaps that will likely lead to job losses beyond the 9,000 already planned by Credit Suisse, though executives have so far said it’s too early to predict.
UBS shares rose after the open in Zurich on Monday, trading at 19.43 Swiss francs ($21.137) as of 9:02 a.m..
Read more: Credit Suisse’s Fate Sealed by Regulators Days Before UBS Deal
Publicly, UBS has said it will give clarity on job cuts as soon as it can. While it was clear that major layoffs were coming, the lender sees retention of talent as a significant part of the takeover’s execution risk.
Firms such as Deutsche Bank AG, Citigroup Inc. and JPMorgan Chase & Co. are gearing up to recruit some of the investment bankers and wealth managers likely to be let go. Already, headhunters saw themselves swarmed by Credit Suisse bankers seeking new jobs, as people from more than a dozen firms told Bloomberg last month.
Read More: The Triumph of UBS Is Also the Humbling of Swiss Banking
Limited Impact
The government resorted to emergency law to push through the deal without having to seek shareholder approval. So while the annual general meetings of the two lenders — coming up this week — are expected to be an outlet for angry investors, they otherwise have limited opportunity to affect the deal.
Shareholder advisers have recommended investors to vote against discharging the bank’s top executives, a step which potentially leaves members open to legal claims. Major shareholder Norges Bank Investment Management, the sovereign wealth fund of Norway, has announced it will vote against the reelection of several Credit Suisse directors, including chair Axel Lehmann.
Separately, the Financial Times reported on Saturday that UBS has a short-list of four management consultants to advise on integrating Credit Suisse. The bank is soon to decide between Bain & Company, the Boston Consulting Group Inc., McKinsey & Co Inc and Oliver Wyman Inc, the newspaper reported, citing people familiar with the process who weren’t identified.
It’s expected to be one of the most lucrative contracts in years for dispensing financial services advice due to the complex, years-long process needed to meld the banks, according to the report.
UBS, Bain, BCG, McKinsey and Oliver Wyman didn’t immediately respond to requests for comment outside of ordinary office hours.
–With assistance from Thomas Seal.
(Adds UBS shares in fifth paragraph)
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