Deal is dead. UBS will not carve out CS First Boston
UBS Aims to Boost Its Dealmaker Ranks, Not Spin Out First Boston (Bloomberg)
Executives are said to have little interest in carveout plan
and in case people forgot massive layoffs coming later this year, this time for real.
Tens of thousands of jobs at risk after UBS takeover of Credit Suisse (FT)
Edit: Removed the links as they were being flagged, but you can look them up by searching those headlines
Finally some numbers around potential layoffs. FT is qualifying by saying it’s not yet confirmed but potentially 17,000 CS bankers getting cut is is fucking huge only made worse with the lateral market being as frigid as it is. Praying folks land in their feet
Is that 17k in addition to the 9k layoffs that CS had originally intended to cut?
No clue, FT article just says 17,000 cuts expected and up to a third of the combined 120,000 jobs in the investment bank could be cut. Good news for most UBS folks though - seems like they’re not at any major risk
Jfc, that sounds like it would single-handedly throw the supply-demand equilibrium of IB jobs off for months if 17,000 iBankers all got laid off at once.
dude lol. credit suisse doesn't have 17k people in their IB division.
We're all gonna die! Analyst 2 confirms 17K Suisse bankers are coming for your job and once they take that they'll have their way with your wife! I can't breathe!!!!!
Agree - so wild that alleged IB professionals on this site buy that
Carving out First Boston never made any strategic sense for UBS. Why would they create a competitor to their own IB division? Even though UBS is focused on downsizing IB, UBS has always intended on keeping its advisory practice due to the synergies between the rest of the bank and advisory within IB (specifically in being able to offer the companies and institutions of UHNW PWM clients IB services as well). Carving out CS IB into CSFB would just create a competitor to their own IB division, and combining UBS IB with CS IB and carving out the combined institution into CSFB would have lost them those synergies with the rest of their platform.
Why does UBS assume they can simply cherry pick the best senior bankers from CS? They were probably waiting around for the CSFB spin. What’s to keep them from joining a firm that isn’t so openly ambivalent about the investment banking business?
im sure Ubs would love to replace all the tech bankers that went to SVB last year
UBS still has a strong advisory practice and their IB practice is very sponsor-driven with strong sponsor relationships and sponsor-focused levfin platform, very similar to CS in that way. Would make sense for some CS seniors to stay on a somewhat familiar platform. Also UBS would probably be offering select MDs incentive packages to stay around, and considering that CS MDs just had much of their remaining deferred bonuses potentially voided by the Swiss government, their ability to negotiate higher comp guaranteed comp packages from competitors has significantly weakened.
Ngl I feel like all those ex-UBS bankers at SVB would love to jump back to UBS right now considering the predicament SVB is in.
They say cherry-pick, but irl they'll just cut 80% everywhere.
Wow that's fucked. Highly recommend CS interns start looking elsewhere for FT.
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Expecting most of the job cuts to come from US and Europe. Over 80% I'd say from US just given size of the offices. CS already had massive layoffs in APAC and EMEA earlier this year. They've shut down entire offices in those regions so there's no one left to cut.
Behind paywall. Anyway to access please?
12ft.io works for FT. Doesn’t for Bloomberg
With so many CS seniors about to be cut any chance we see a Moelis/UBS situation where CS's strongest remaining seniors band together and start their own boutique?
Personally I doubt it, the seniors lost an immense amount of money and their largest backer for what would have been the independent spin out who they could have turned to financing for this type of endeavor has recently reported to no longer be interested in the venture according to Bloomberg. I think they’ll probably just take what they can get either from UBS or whatever bank’ll hire them like fucking WF who already hired a bunch of CS seniors before and then try and rebuild their wealth.
Moco raided UBS?
Yes? That's how MoCo came into existence.
The start of Moelis was essentially a huge UBS LA exodus of senior bankers.
What's the possibility that we're about to see the re-emergence of the legend of UBS LA back to its glory days. Seems like it may make sense for CS LA's seniors to stick around with UBS given UBS's strong suit is its sponsors relationships, and CS LA's FSG bankers are some of the best in the industry.
Would be interested in how the LA office which is strong or the sf office is impacted
I don’t think UBS has any interest in geographies outside of NY for advisory, they have a Houston office, but more or less closed down SF after SVB exodus and closed Chicago before that. I think these satellite offices will be first to go honestly.
That's fair, but it could be argued that UBS closed down those offices because they were weak. CS SF Tech is solid, and it seems like Tech is one of the groups at CS that UBS is most interested in, so personally I think UBS SF could see a resurgence after being integrated with CS SF Tech. Same with CS LA, they're a very strong group and if the seniors stick together, UBS would be losing out on not keeping the group together.
UBS sponsors already serve the same exact clients as CS FSG. They could bring on a couple of analysts from CS but no way they're keeping the entire group. Do you know how streamlined these groups are? The collapse of CS is not equal to more west coast sponsor activity, so why should they keep the headcount? If you're asking whether CS SF and LA offices will be somehow insulated from a 70-80% layoff, my answer is a strong No. You also don't really seem to have a good idea of what's been going on in their SF office, how many MDs have left including the ones they hired less than a year ago (Internet, S/W). I suggest you go redo your research.
Can't see Klein sticking around now that UBS is reportedly not interested in paying him anywhere close to what CS was or handing IBD to his control.
There’s no way Klein will stick around now. Most likely he goes back to his boutique and maybe buy out a couple of the rainmakers at CS for pennies on the dollar to expand M Klein & Co
At this point I'm just surprised that Robert Kiyosaki predicted all this. I thought the old man knew nothing about financial markets except buying up properties
Highly unlikely CS IB will get carved out at this point. UBS-CS deal was a Swiss government intervention after they start seeing run on the bank. The Swiss government will not allow anything material happen to the current structure of CS before UBS takes a good look first and pick what they want to keep. The original carve-out plan I believe also included capital injection from CS, which UBS will most definitely not approve. Financing a deal to create a competitor makes no sense.
Bro wtf is UBS gonna do with us please don't kill the entire bank wtf
Klein has risked his reputation for nothing lmao
At the end of the day, if you read the press he is being portrayed as a shady banker who essentially decided to acquire his own 20 man shop for $150 M. That can’t be good for business
Yeah the conflict of interest present in that deal is crazy.
I think it was more like $170M and he got like $10-20M in deal fees. His representative as per a FT article claimed he had the best intentions with his relationship with CS. Bullshit, guy just wanted a sweat payday.
Indirectly heard from CS Heads that all M Klein is worried about right now is whether his boutique deal closes. He just wants a check
Eh, he risked it for a massive payday. Just cos it didn't work out didn't mean it was a bad move at the time.
This is good for incoming UBS interns / UBS folks right?
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