Credit Suisse bleeds bankers, UBS saves on payouts

Rivals have poached dozens of senior Credit Suisse investment bankers in recent months, reducing the need for big redundancy packages for UBS.

The exodus of talent from Credit Suisse’s investment bank has been higher than UBS expected, as rivals have made opportunistic moves to hire senior bankers and their teams.

Deutsche Bank has been one of the most active in poaching Credit Suisse bankers, with more than 40 former employees now on its books. Jefferies has also been a major player, bringing on at least 25 former Credit Suisse bankers.

Santander has also been active in the market, hiring more than 20 former Credit Suisse bankers. The Spanish bank’s CEO, Hector Grisi, spent 18 years at Credit Suisse earlier in his career, and he is reportedly keen to bring in some of his former colleagues.

The combined UBS-Credit Suisse employs about 115,000 people globally, but as many as 20,000 roles are expected to be cut as part of the integration. The majority of these cuts are expected to come from Credit Suisse’s investment bank.

The poaching of Credit Suisse bankers by rivals is a sign that the market for investment banking talent is still strong. However, it also highlights the challenges that UBS faces in integrating Credit Suisse’s business. Analysts have predicted that the restructuring process could cost as much as $10 billion.

Adding to potential headaches for UBS is a class action by Credit Suisse investors that is being spearheaded by Lausanne-based start up LegalPass. Yesterday a group of Swiss institutional investors operating as the Ethos Foundation and representing around 5% of shareholders signed up to the legal claim.

“Since Finma has decided to withdraw shareholders’ voting rights, the only way to challenge the exchange ratio is to go to court, as LegalPass intends to do,” Vincent Kaufmann, chief executive of the Ethos Foundation said to the FT.