While the emergency merger of the country’s two largest banks is taking shape, Switzerland’s top prosecutor launched an investigation to gather evidence on possible crimes that may have occurred around UBS Group AG’s purchase of Credit Suisse Group AG.
The agreement made last month could result in up to 11,000 job layoffs in Switzerland and then another 25,000 cuts globally, according to a senior manager at UBS who has been cited in the Swiss newspaper SonntagsZeitung on Sunday.
The Swiss bank’s executives stated last week that they had been committed to providing as much information as possible regarding job losses but it was still too early to provide exact figures. A UBS representative did not respond to queries about the report.
Without going into considerable detail, the Bureau of the Attorney General of Switzerland stated Sunday that it was attempting to collect data on “a number of topics” related to the acquisition. According to a release, the chief federal prosecutor requested an inquiry by local, state, and federal authorities.
Years of Credit Suisse issues contribute to a last month’s steep decline in trust at the company, which resulted in the longstanding rival’s $3.3 billion government-brokered acquisition. UBS has stated that it expects headcount cuts to result in benefits of around $6 billion. As of 2:10 p.m., UBS stock was down 3.1 per cent at 18.68 Swiss francs.
“In view of the relevance of the events,” the top federal prosecutor “intends to pro-actively fulfil its mandate and responsibility to contribute to a clean Swiss financial center and has set up a monitoring system in order to take immediate action in the event of any circumstances that fall within its jurisdiction,” the office said.
The attorney general ordered national and regional authorities “to investigate and compile information” in order to “analyze and identify possible offences,” based on the claim. The investigation may focus on who disclosed details about the acquisition before it was finished, according to a previous prediction by the Swiss daily NZZ am Sonntag.
Talent Retention
UBS has stated that it will provide an explanation of the employee layoffs as quickly as it can. Even though it was obvious that there would be large layoffs, the lender considers talent retention to be a significant execution risk for the acquisition.
Companies including Deutsche Bank AG, Citigroup Inc., and JPMorgan Chase & Co. are preparing to hire a few of the money managers and investment bankers who are apparently going to be laid off.
Switzerland’s top prosecutor launched an investigation to gather evidence on possible crimes that may have occurred around UBS Group AG’s purchase of Credit Suisse Group AG.
As individuals from more than a hundred organisations told Bloomberg last month, headhunters have already seen that they are being overrun by Credit Suisse bankers looking for new roles.
