Switzerland’s two largest banks have to slash their spending. Signs are mounting that both will lower the cost boom again before year-end. Employees are expected to face the brunt of measures.
Third-quarter results showed that UBS and Credit Suisse are still copiously spending.
Market leader UBS saw its revenue melt as wealthy clients, nervous about trading, stayed on the sidelines. Income dropped faster than the bank could slash its spending. Credit Suisse is on track with beating its cost target for this year, but third-quarter spending actually rose 2 percent on the year.
Disappointed Investors
Investors had little mercy, indicating they expect more from cost-cutting efforts. One of the most powerful cost measures: laying off staff.
The big banks’ leadership apparently also agree. UBS private banking head Juerg Zeltner recently told «Finanz und Wirtschaft» (behind paywall, in German) that a cost-cutting program disclosed last year was largely over. After cutting 400 wealth management jobs to September, Zeltner (pictured below) said a «a considerable reduction» would take place before year-end.
His comments come shortly after a report that a unit tasked with setting up customized solutions for wealth clients, Investment Products and Services, would cut several dozen jobs. UBS is midway through a 2.1 billion cost-cutting.
Cutting External Staff
Credit Suisse CEO Tidjane Thiam also has pithy words on the subject, flagging a renewed cost push for the bank’s Dec. 7 investor day. It is unclear what this means for its 47,690 employees. In Thiam’s (pictured below) words: «We can still do much more on saving costs. This is just the start.»
An unpleasant Christmas surprise for Credit Suisse bankers, who have been spared large-scale layoffs until now? Of 5,400 jobs that the bank has cut thus far this year, 3,500 were external consultants and another 1,300 were contractors, Swiss daily «NZZ» (in German) reported. That means that Credit Suisse actually only cut 623 permanent employees this year.
No Future in Banking
Fear of job losses is rampant outside UBS and Credit Suisse too: industry lobbies expect considerable cuts before the year is out.
The mood among bankers can best be summed up as «Work at a Bank? No, Thanks!». One third wouldn't choose to work in finance again, while 40 percent discourage school leavers and university graduates from taking up work at a bank, a survey of 430 people conducted by finews.ch and Communicators found.
