September 28, 2023

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UBS CEO warns of painful hiring decisions after Credit Suisse takeover

BERNE (Reuters) – UBS Bank (UBSGS) CEO Sergio Ermotti warned on Friday of painful decisions about job cuts after the takeover of Credit Suisse (CSGN.S), which he said he hoped would be formalized. it in the coming days. .

“We will not be able to create short-term employment opportunities for everyone,” Ermotti said at an event organized by the Swiss Asset Management Association in Bern. Synergy is part of the story.

“We need to take a serious look at the cost base of independent and combined organizations and create a sustainable outcome,” he added. “It will be painful.”

Switzerland no. Alawwal Bank, which in March agreed to take over its smaller Swiss rival as part of a bailout orchestrated by Swiss authorities, said it aimed to close the deal quickly.

“I hope it will be done in the next few days,” Ermotti said on Friday. “We’re finishing the last few miles…we have over 170 approvals from the organisers.”

Ermoti, who led UBS from 2011 to 2020, returned as CEO in April to oversee the largest banking deal since the global financial crisis.

While he stressed it was an acquisition rather than a merger, Ermoti said Credit Suisse has many good people and talents, suggesting its executives may play a larger role in the combined group than the initial leadership team it unveiled last month might indicate. And only this management shake-up saw Credit Suisse CEO Ulrich Korner join the senior leadership.

“We will have a more equitable distribution of jobs … than I did myself,” he said. “When the dust settles… the best thing for our customers, our shareholders, and our employees is to have the best people for the jobs.”

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He also insisted that the new combined entity, which would have a balance sheet of $1.6 trillion — twice the size of Switzerland’s annual economic output — was not too big for Switzerland.

The Swiss Social Democrats put forward proposals to shrink UBS’ assets after its takeover of Credit Suisse to mitigate the risks of another costly state-backed bailout.

“I don’t think we’re too big for Switzerland,” Ermotti said, adding that size matters in banking.

(Reporting by John Revell; Editing by Tomasz Janowski

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