The integration of Credit Suisse is causing discord in Switzerland. Internally, there's a surprising amount of confidence at the new UBS. finews.asia attempts to explain why. 

The time of grand moves is over for UBS. With the decision to let Credit Suisse disappear by 2025, integration has reached the implementation phase, and working through the laborious details of merging the country's two largest banks has begun.

Merging the banks was delayed because of the decision to incorporate Credit Suisse Switzerland at the end of August. But the noise from numerous departures at both banks has grown louder and provides food for thought.

Firmly Convinced

But this is likely only a foreshadowing of the clamor to come when layoffs and job cuts mount. UBS leadership under CEO Sergio Ermotti shortened the integration timeline by one year to 2026 and squeezed the savings target to $10 billion from $8 billion. In Switzerland alone, 3,000 layoffs are said to be coming.

The external view of the merger isn't necessarily shared internally at UBS Switzerland. Research reveals that the mood, at least at the top of the company, is surprisingly confident. There's a firm belief the Credit Suisse takeover will succeed and a global wealth management powerhouse will emerge.

Sense of Mission

Ermotti exudes a certain sense of mission and believes incorporating a former rival is for the country's good. The financial industry needs an even larger major bank to compete globally.

Experience to date supports this confidence. Since the emergency rescue on March 19, UBS whizzed past merger milestones. The basic scenario of the full integration of Credit Suisse was altered at the very end. Strategically and operationally, the bank stayed on course and attracted billions of new money in the second quarter. 

Well-Oiled Machine

This is due in no small part to a business model that's been fine-tuned for comparatively stable asset management for over a decade, with dedicated staff and increasingly sophisticated offerings. And a promise easily understood by customers and employees alike: The bank wants to be the world's leading wealth manager.

Former CEO Ralph Hamers, who led the bank from 2020 to the beginning of 2023, refrained from throwing wrenches into the well-oiled machine. He focused on digitizing processes and modernizing the way teams work. UBS, seeking to become a $5 trillion asset manager thanks to those from Credit Suisse, is now a large international group with well-honed processes and a uniform appearance table to draw on global resources.

Minimal Training Time

This was evident by the appointment of the new head of asset management in Switzerland, August Hatecke. He was brought back from Singapore to take on the job and brings years of experience at UBS and Credit Suisse. From his time as a banker to the super-rich in Switzerland, he knows local regions, minimizing the need for familiarizing himself with the market.

The sheer scale of these resources should be considered. In Switzerland, UBS operates as a universal bank, offering its major clients a wide range of services from corporate and private banking to specialized funds and complex investment banking services.

Strategic Asset Allocation

This is a good thing, as customer satisfaction in Switzerland is currently good. For the management, it confirms the existing model can attract new money, including through client referrals, offering a solid starting point to convince Credit Suisse's Swiss clients to stay. From a strategic asset allocation point of view, many will be eager to transfer some of their money away from the new megabank.

UBS is well-positioned to flex its muscles when retaining clients and employees. For now, the word around the campfire is that the focus is primarily on motivating employees and listening well to what's happening with clients. It's conceivable that what is now Switzerland's largest bank will counter the lucrative packages of its competitors with something similar.

On the customer side, lowering fees or enticing customers with special conditions is one strategy. Such tactics are likely to push smaller competitors to their limits quickly.

Defense Tactics Refined in Asia

UBS's global experience should be considered when it comes to retention measures. It's been active in Asia for over 50 years and is now the largest private bank in the region. In this respect, UBS is traditionally the obvious address for poaching attempts from competitors, especially since it maintains a training center for young bankers in Singapore.

The bank's defensive techniques are well practiced, leaving a wealth of experience from which Swiss colleagues now benefit.