Many of them sit in their offices, waiting for something – anything - to happen. finews.asia takes a look.

If nothing else, the story of UBS’s forced rescue of Credit Suisse is out there. And for all those who work in the financial hub itself, the issue percolates constantly on a backburner. 

As finews.asia has already commented on, bank employees outside Switzerland in many of the world’s major financial centers have grown inured to annual - sometimes quarterly - redundancy exercises that weed staff off spreadsheets holding little more than names, teams, and compensation.

That is potentially why the potential scale and extent of any domestic restructuring may come as more of a relative shock to a significant number of Swiss employees. Many have been, at least until now, largely protected from the rawer banking winds blowing elsewhere.

Difficult Environment

finews.asia asked several sources inside the bank working in Credit Suisse’s Swiss business and they agreed on being quoted anonymously. A common element all of them expressed was the incongruity of the environment they found themselves in.

As an example, a senior banker working a front-line position in the domestic business maintains that there has been no official contact with UBS yet even though the transaction was originally announced publicly in March. That is a sharp contrast with the high level of activity between the front lines of the two former competitors in other lines of business.

According to the source, this makes sense in that both banks remain competitors - but it still doesn’t make the situation less awkward. The internal view is that it may take another two months to arrive at what seems like a relatively obvious decision - which would be the full integration of both entities.

No Client Information

UBS is still in the process of analyzing the domestic business of the rescued bank, but it is still only a relatively small amount of information about the lines of business, the number of people employed, and risk exposures that are ultimately aimed at helping to integrate both entities. Until a final decision is made, client information won’t be shared.

What it does mean is that mean that lower-ranked employees and junior executives will continue to depart. Clients will also keep heading off to ostensibly greener pastures, and those that stay will be reluctant to do any new business, the source indicated.

Another area of discontent relates to compensation. Although few in Switzerland, and even internationally, would put much stock into any Credit Suisse banker mentioning compensation considering the events that led up to the bank’s collapse, money is still a pre-eminent factor at the fore of the minds of many bankers.

Clawback Frustration

To that effect, a long-tenured bank executive indicated a certain frustration with the fact that UBS was sticking to its clawback provisions should a banker leave at their own volition - even though the unvested, incentive-based portions of their compensation had been rendered worthless in the meantime. According to that person, if a manager does leave, they must pay all the current year’s bonus and a bit more than half of 2022’s in Switzerland.

A third source, also working in the Swiss business, indicated that most people he knew were waiting to see what would happen. Many were above the age of 50 and it seemed like it was the intelligent thing to do.

The social plan in Switzerland was also helping employees sit on the sidelines as it gives everyone at least one year before any real decisions have to be made.

Too Much Overhead

«The waiting is strange. One thing for sure is that if the business is integrated there will definitely be too much overhead,» that source indicated.

One of the key issues with being little more than a veritable lame-duck entity is the fact that none of this year’s business objectives have been modified even though they were set well before the forced rescue. 

«The objectives that were given at the beginning of the year haven’t changed. The bonus communicated for 2023 is also based on the financial targets being reached,» the source said.

Numerous Town Halls

Another source in a control function based in Switzerland puts everything into a different perspective. Many have gone through the full gamut of emotions since the rescue was announced - from angry - to sad - and then disappointed. 

Unlike with the front-line bankers, there has been official communication to the teams on the part of UBS although much of that has involved spending a great deal of time dialing into numerous townhalls. Most have grown to accept the very fact of the transaction, although most Credit Suisse employees still call it a merger, which itself is a testament to the strong internal messaging around the deal itself.

«We wait to be picked and selected by UBS knowing we are in a disadvantageous position. We have heard no concrete planning related to our team and we anticipate that we will be let down and we worry about that,» the source stated.