If they merge, what is the impact of ~10‘000 employers losing their job overnight? Has this happened before in Switzerland?
They wouldn’t lose their jobs just have a new contract.
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There will likely (or rather definitely) be “inefficiencies” to be sorted, i.e. out of 2 departments with 20 & 30 people, not all 50 will be needed any more in the new merged one.
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CS has 50k employers, 17k in Switzerland of which 10k alone work in Zürich. It‘s very unlikely that UBS will grow to 125k employers with 38k working in Switzerland? I assume thousands will lose their job?
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Big iconic thing gone overnight: SwissAir
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I read some of the plan might be to spin up/resell the subparts, so it depends?
Of course, most of COO organisation will be let go (IT, HR, finance etc, the horizontal layers), eventually.
What I mean is that Office staff for bank locations will need to stay until they will be able to reduce physical footprint to a smaller set. Also depends if they keep the brand separate or not.
Banking operations (asset and wealth mgmt, etc) will also probably be sorted out heavily as these will be redundant.
But these things won’t happen overnight. Maybe not even this year.
They in CS can’t blame anyone but themselves (and the helm) though…
Had me laughing to myself 
… such a good analogy
Totally agree…they’ve been the noisy child in the room for a while and the SNB will probably prefer to not be directly associated with them more than necessary (past confirming/committing what they did this past week).
If its feasible, in my totally uninformed opinion, UBS to take all (as quickest and “internal to CH”) seems logical. Then they take a minimal amount time needed to find the most efficient way to meet the mid-long term expectations in line with SNB expectations (i.e. spin off/before layoffs and profits etc)…
SNB hasn’t forgotten 2008 even if they “encourage” an arranged marriage for convenience and not love…and UBS will indeed make money off it. IF this happens, expect big bonuses at UBS for 2023 
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This is bad news for all of us:
- Switzerland loses an iconic brand and tax revenues go overseas
- Less domestic competition e.g. CS currently provide zero TER funds in Finpension
- Highly skilled jobs go overseas
I hope a way is found to keep a retail bank separate as a competitor to UBS.
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Why should that change?
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Only 1 billion for a bank with 1.5T AUM?
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Oof, 1B and no shareholder vote. Saudis definitely will be angry at Switzerland if this passes.
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UBS earned what last year? Close to 8 billion? This is just a side project from them if it only costs 1 billion.
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Well, in reality, they knew what risk they are taking, so, who cares?
You are doing a multiplicative comparison that has no meaning. Perhaps you are conditioned by the idea of 0 being a lower bound.
Depending on what is in their 531 Billion CHF assets, perhaps one will discover that there is a further 10 Billion hole on the asset side (the next Greensill / Archegos / …). In that case the value would be -9 Billion after the deal with UBS.
Then you have the costs related to the acquisition.
Probably it is a very bad deal for UBS to take over CS “as is”.
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Why would UBS maintain a legacy CS fund that competes against their own funds which charge higher fees?
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UBS has their own zero TER institutional fund offerings. E.g. the finpension vested benefits foundation offers them as alternative to CSIF and Swisscanto. If UBS takes over CS Asset Management, I would expect equivalent funds to get merged at some point. Small / less profitable CS funds without an equivalent UBS fund might get closed down.
Also, these zero TER mutual funds still have fees (unlike e.g. Fidelity zero fee funds). The fees are simply negotiated with institutional clients and paid in cash instead of taken out of the fund.
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I don’t know what will happen but with less competition in the market place (quasi duopoly becomes quasi monopoly) it doesn’t bode well for fees
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I’m also concerned about reduced competition. However, with regards to institutional index funds, at least Swisscanto exists as well.
With regards to retail banking, I would hope that the CS Swiss Bank won’t stay at UBS (WEKO might insist on that as well).
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I mean, I wouldn’t feel particularly bad for them. Just wondering about the geopolitical consequences if the Swiss government changes the law such that the shareholders can no longer vote on the transaction. Not sure if the Saudi government, which holds 80% of Saudi National Bank’s shares, would just say “Our bad, that was a risky bet, let’s write the money off.”
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