Around 80 percent of Credit Suisse’s investment banking staff in Hong Kong will be laid off starting this week as part of the Swiss bank’s integration with UBS Group. Only approximately 20 bankers out of the 100-strong team in the territory will be spared from the cuts, suggested news agency Reuters. Hong Kong accounts for the most significant share of Credit Suisse’s investment banking operations in Asia.
The news comes after the merged UBS and Credit Suisse announced in June that they would cut 8,000 jobs globally as part of their integration plans. While this slashing of staff is expected to impact all regions, the cutbacks are expected to be more significant in Asia.
Several Credit Suisse investment banking teams will be downsized to just one or two staff members, while some sector coverage teams will be eliminated. Christian Deiss, head of Credit Suisse’s Asia-Pacific M&A business since 2021, will lead the regional investment banking transition in collaboration with UBS.
According to the Reuters report, most of the cutbacks in Hong Kong will be across the fixed-income and equity markets groups. In addition to Hong Kong, Credit Suisse has an investment banking presence in the regional markets of Singapore, Malaysia, Australia, South Korea, and Vietnam.
Despite the reduction in investment banking staff, the merged UBS and Credit Suisse will continue to focus on growing businesses, such as private banking and wealth management. However, the job cuts will make it more difficult for both banks to attract talent, particularly junior investment bankers.
Fund managers also pointed out that UBS is taking on a troubled legacy with the acquisition of Credit Suisse, and they will have to deal with legal risks and the ongoing investigations into the Swiss bank’s alleged illegal activities.
Credit Suisse’s stock has dropped 70% this year due to unfavorable market conditions and controversies that led to a massive outflow of client assets.
The bank has had to pay multi-million dollar fines and compensation to clients due to the misconduct, and its revenue has been significantly down this year. This has made it more difficult for the lender to keep up with its dividend payouts to shareholders.
Despite these problems, Credit Suisse remains a top global player in many sectors, including investment banking, asset management, and private banking. It is also a key player in the Asian markets, with offices in Singapore and Tokyo. Its private banking business is robust in Japan, where the firm has been a long-term partner of the Japanese government. The company also has a strong position in China, with an office in Shanghai and a presence in Beijing. The firm has used its Asian presence to help its private and institutional clients expand their business in the region. It has an extensive network of relationships in the region, including with local and multinational companies and financial institutions.