China Fund News Amman
According to foreign media news, UBS Group recently announced that it will start five rounds of layoffs around the world from June to November this year, with a total of 50% to 60% of former Credit Suisse employees likely to be laid off, and it is expected to save a total of 12 billion Swiss francs (about 95 billion yuan) in costs.
In June last year, UBS Group AG announced the completion of the acquisition of Credit Suisse, becoming a "giant" bank with total assets of $1.6 trillion. At the same time, the number of employees increased by about 45,000 to about 120,000.
UBS declined to comment on the news.
or 30,000 to 35,000 layoffs
According to analysts' estimates, UBS could cut 30,000 to 35,000 jobs worldwide.
The layoffs are reportedly expected to affect more than 100 positions in the firm's global investment banking division, beyond the usual layoffs of underperformers. It is understood that the overall layoff ratio of UBS Group is 20% to 30%, mainly in the investment banking business department and wealth management department. Considering the market efficiency, the proportion of layoffs in Asia is relatively large.
This follows multiple rounds of layoffs across UBS's business units, including the laying off of a group of senior investment bankers in January and layoffs in the Asian private wealth and investment banking teams.
In February, UBS also announced plans to cut costs by $13 billion over the next two years as it completes its acquisition of Credit Suisse, about half of which comes from employees.
Previously, it was also rumored that UBS Group AG will make deep adjustments to the 19 equity and bond private equity funds launched in China since 2016, and may close up to 17 of them, and plans to return the funds to investors. UBS Asset Management (Shanghai) Co., Ltd. will cut about one-third of its team of 50 people, and UBS Asset Management is a wholly-owned private equity of UBS AG.
UBS Group AG said that China remains a key market for UBS and will continue to make strategic investments.
Two consecutive quarters of losses
In November 2023, UBS announced its financial results for the third quarter of 2023, which was the first full quarterly report after UBS completed its acquisition of Credit Suisse. UBS's revenue grew sharply, but it lost money for the first time in six years due to the drag from the consolidation of Credit Suisse's business.
By the fourth quarter, the situation was not improving. At the end of March this year, UBS's 2023 financial report showed that the company's total revenue in the fourth quarter was $10.855 billion, an increase of 35.2% over the same period in 2022, but the pre-tax loss in the fourth quarter was $751 million, including a $508 million loss related to the investment of SIX Group.
Two consecutive quarters of losses have led to the perception that UBS faces a very high level of risk in the future. UBS Chairman Colm Kelleher also warned in November that 2024 would be the most difficult year in years as the legal merger with Credit Suisse was completed.
To add insult to injury, the Swiss authorities recently proposed a capital reform package for the banking sector. "Under the currently applicable requirements, UBS parent companies are required to provide 60% capital support to their foreign subsidiaries," the Swiss authorities wrote in a statement. The goal of the Federal Council is to significantly increase capital support. ”
Regardless of the nominal quota, Swiss Finance Minister Keller-Sutter wants UBS's support for foreign subsidiaries to be close to 100%, according to sources.
Analysts and media estimates suggest that UBS Group AG could face between $15 billion and $25 billion in new regulatory capital requirements.
On this news, UBS Group's share price has continued to fall for the past two weeks, falling by nearly 10%.
Editor: Captain
Review: Chen Siyang