UBS has set ground rules for its new Credit Suisse staff after sealing the biggest merger in banking since the 2008 financial crisis following a state-orchestrated emergency rescue.
The combined Swiss banks will create a global wealth-management titan and ends Credit Suisse’s 167-years of independent existence.
UBS is to impose tight restrictions on its new bankers including a ban on new clients from high-risk countries and on complex financial products, according to the Financial Times.
Executives have reportedly drawn up a list of nearly two dozen “red lines” that prohibit Credit Suisse staff from a range of activities from the first day the two banks are combined.
The completion of the takeover ends more than two months of uncertainty for employees after UBS finalised negotiations with the Swiss government over a 9 billion Swiss franc (£7.9bn) guarantee against potential losses on Credit Suisse assets.
UBS agreed to take over Credit Suisse in March in an emergency sale brokered by the government, after a confidence crisis and a torrent of client outflows sent it hurtling toward bankruptcy.
The coming months are likely to be “bumpy”, UBS chief executive Sergio Ermotti had warned on Friday, saying the government-orchestrated operation would require “waves” of difficult decisions, particularly regarding employment.
“We have finalised the legal takeover of Credit Suisse,” the bank said in an open letter published in the NZZ newspaper, calling it “the beginning of a historic new chapter”.
UBS, the country’s leading bank, was forced into the marriage to prevent its rival from going under – with potentially catastrophic consequences for the global financial system – but it had not waited for Monday’s announcement to start preparing to absorb Credit Suisse.
Andreas Venditti, a financial analyst for Vontobel, said UBS has been preparing since mid-March and already has an idea of what it wants to keep, close or sell, but had been “limited in what they could do” until the merger was sealed.
The merger of Switzerland’s two biggest banks will be complex both technically and politically, resulting in a megabank unlike the Swiss have ever seen – a size that has political leaders worried.
Thousands of jobs could be lost because of overlapping operations.
