For Credit Suisse's 50,000 employees, many questions remain.
Credit Suisse’s fate is sealed, as Swiss rival UBS acquired the bank for 3 billion francs in a historic deal that has shaken the financial sector. But for its 50,000 employees, many questions remain.
“I’ve cried twice in my career. One during my first week in investment banking when I thought ‘what the hell have I let myself into’, and once today,” said one investment banker contacted by Financial News. The number of potential redundancies from the tie-up has yet to be announced, but it is expected to be significantly higher than the 9,000 cuts planned by Credit Suisse.
Responding to questions, executives reiterated that a strategy laid out in October, which involved refocusing Credit Suisse around wealth management, cutting risk-weighted assets and spinning out the investment bank into a separate unit called CS First Boston, was still the right one and the bank’s demise was caused by liquidity issues, the people said.
At an offsite meeting in New York earlier in March, Klein outlined plans for a Goldman Sachs-style partnership for around 100 of Credit Suisse’s investment bankers, who stood to hold around 20% of the equity in the new venture. As recently as March 14, Körner said that he was “excited” about the CS First Boston spinout, which was aiming to refocus Credit Suisse’s investment bank around so-called capital light activities such as M&A.
“A lot of us could have left a long time ago, but have made a conscious decision to stay,” said one dealmaker. “It was high risk, but we trusted the changes that were being made, avoided the cuts and were looking to future of the franchise. People might say ‘why bother?’ when bonuses are shrinking and the bank is taking so many hits. But the culture here is better than a lot of Wall Street firms and they treat people with respect.
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