How safe are Credit Suisse wealth management jobs, really?
UBS's emergency takeover of Credit Suisse will undoubtedly lead to job cuts, but when the cuts are made some people are likely to be safer than others.
The general sentiment is that Credit Suisse’s wealth managers in Asia should be some of the safest. In his call with investors on Sunday evening, UBS CEO Ralph Hamers described the Credit Suisse business as “really strong” in the region and said the merger was an opportunity to “accelerate" UBS's strategy. The positivity was reportedly followed up with a town hall touting retention packages for key staff and describing the two banks' combined wealth management operations as “a big family.”
The reality might not be so blissful.
Market intelligence firm Tricumen thinks Credit Suisse's wealth management firms could be at the sharp end of the coming job cuts. Tricumen predicts that 2,000 of Credit Suisse’s 3,000 front office wealth management & private banking staff will be made redundant in the next 12 months.
Its rationale is that new super-UBS “will struggle to maintain, let alone increase, [Net Interest Income] margins,” and that the bank’s efforts will be focused on stemming client outflows throughout 2023, whilst having “stiff competition” in its main regions of competition.
UBS’ revenue mix, and “high-quality investment management fees” specifically, will be put to the test, Tricumen says.
The outflow of ultra-high net worth individual (UHNWI) client money from Credit Suisse might also be worse than previously thought, too. Tricumen estimates Credit Suisse's bank’s Assets Under Management (AUM) fell by some $200bn during the first quarter of 2023 – implying that the bank already needs a lot fewer wealth managers to manage its diminished pool.
Tricumen's observations follow reports that Credit Suisse's wealth management business was already struggling in the APAC region. Accusations of “idealism and impracticality” in the division came as the bank’s onboarding process for new clients was overwhelmed by new legislation. Senior staff have already departed - including Chien Chien Wong, the Singapore chief, who left the bank last month.
UBS, meanwhile, already has a strong presence in Singapore, leading to plenty of potential overlaps.
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