The Banking Executive Magazine - March 2023 Issue

Shocked Credit Suisse STAFF FEAR UNCERTAIN FUTURE DESPITE UBS RESCUE DEAL Credit Suisse staff arriving to work in Hong Kong and Singapore fretted about retrenchments and retaining business after larger Swiss rival UBS agreed to swallow the 167-year-old bank in a state-backed rescue. Swiss authorities capped a tense week of markets by engineering a 3 billion Swiss francs ($3.24 billion)takeover of Credit Suisse by UBS, supported by billions in state funding, while angering holders of risky bonds by writing down their debt to zero. Credit Suisse employs 50,000 people globally across wealth management, investment banking and asset man- agement operations, with more than 150 offices in 50 countries. The bank had been steadily losing wealth management market share to UBS and to more well-capitalised U.S. banks in investment banking in the last few years, but remained the second-biggest wealth manager in Asia, behind only its acquirer. "It's an extremely sad day to see us ending our legacy this way," said one Singapore-based senior employee in Credit Suisse's wealth management unit, who like other staff spoke to Reuters on condition of anonymity. Credit Suisse told staff its wealth as- sets are operationally separate from UBS for now, but once they merged, clients might want to consider mov- ing some assets to another bank if concentration was a concern, ac- cording to an internal memo. Outside its office near Singapore's central business district, nearby cof- fee shops, usually bustling with bankers from Credit Suisse and rivals, were less crowded. Some of the bank's employees brushed aside questions from Reuters journalists waiting outside the office lobby. Credit Suisse is ranked 20th on the league tables for equity capital mar- kets for the first quarter in Asia Pa- cific including Japan, according to data from Refinitiv, with a 1.1% mar- ket share. Still, it remains a powerful equity capital markets entity in Southeast Asia's growing markets and shares the second spot with a 9.3% market share, up from 3.2% for a year ear- lier. As a giant wall backdrop as high as the ceiling with "Credit Suisse AIC" emblazed on it glowed in the lobby of a colonial interior hotel, the bank said its chairman and CEO would not turn up at the event. UBS warned that it would pare back much of Credit Suisse's investment bank, which Credit Suisse had planned to spin off. "I don't know if I get to stay, leave, or should I consider my options now?" said one Southeast Asia-based banker, who also complained of pressure from clients to provide an- swers within 24 hours to questions about the UBS deal. the BANKING EXECUTIVE 36 ISSUE 171 MARCH 2023