Credit Suisse to operate under own flag after UBS takeover

The operational fusion of Credit Suisse with UBS will take months, if not years, to complete. © Keystone / Michael Buholzer

Swiss bank Credit Suisse will continue to function under its own name as a separate subsidiary of UBS in the first phase of the takeover process, it has been announced.

UBS said the legal takeover of its main domestic rival will be completed “in the next few weeks”. But Credit Suisse clients will see little difference “for the foreseeable future”.

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The emergency fusion of Switzerland’s largest two banks was announced on March 19 with Credit Suisse poised to collapse under the weight of a bank run.

UBS said on Tuesday that the takeover will be completed in stages once the legal formalities of the deal have been concluded.

But the operational fusion of the banks will be played out over the coming months and years.

“The integration of the businesses and legal entities will take time,” said UBS CEO Sergio Ermotti. “This is a pivotal moment for UBS, Credit Suisse and the entire banking industry. Together we will solidify and represent the Swiss model for finance around the world.”

To start with, Credit Suisse will “continue to operate independently” with current CEO Ulrich Körner keeping his job under UBS ownership and taking a position on the executive board of the UBS mega-bank.

There will be no major overhaul of Credit Suisse’s governance or its much-criticised risk control systems, “though some new policies will be put in place to ensure that UBS Group has effective oversight”.

The stop-gap arrangement is designed to minimise disruption to Swiss banking clients and the larger global financial system.

But UBS declined to give hints about its mid-to-long-term vision and notably steered clear of talking about potential job cuts.

Before the takeover, UBS employed just over 72,000 people worldwide. Credit Suisse had 50,000 employees but was already slimming down its workforce under a reconstruction plan announced last autumn.

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Unions have expressed concerns about job cuts, with the SonntagsZeitung newspaper predicting a cull of up to 35,000 staff.

The UBS statement also made no mention of legal challenges to the takeover, either by disaffected bondholders or a probe by Swiss federal prosecutors.

The Swiss parliament had little say in the emergency takeover itself but some political parties are demanding tighter regulations to better control the risk posed by the merged banking giants.

This includes calls to separate Credit Suisse’s domestic operations, which takes retail deposits and issues mortgage and business loans to Swiss clients, into a separate legal entity.

On Tuesday, UBS named several key managers besides Ulrich Körner. While many key staff will remain in place, Todd Tuckner will replace Sarah Youngwood as group Chief Financial Officer.

Michelle Bereaux, who has “led multiple firm-wide transformation projects” during her 23 years at UBS has been appointed ‘Group Integration Officer’.