Potential Implications of Credit Suisse’s Takeover for Customers, Shareholders, and Employees

The takeover of Credit Suisse by UBS will have consequences for CS clients. But they will be very different depending on the type of clientele. We take stock:

1. Do you have a Credit Suisse account? Not much will change

For small savers, do not panic. Nothing should change except for the upcoming adaptations of the general conditions of the future big bank. You will be able to continue to withdraw money through the usual channels, bank card, etc., and to make your usual payments such as payment of rent, etc. Everything should continue to work.

2. Should we fear for our assets?

The money you have in a Credit Suisse account is normally safe. The new bank UBS is sufficiently capitalized and there are no objective reasons to have fears. Especially since the Confederation already guarantees deposits up to 100,000 francs per customer and per bank. But it is not impossible that the insecurity that affected Credit Suisse last week (clients withdrew nearly ten billion francs each day) will affect UBS in turn.

3. Do you have shares in Credit Suisse?

The big losers are the shareholders of Credit Suisse. They have already suffered considerable losses in recent months. Friday evening, the price was already very low, at 1.86 francs per share. Now, it was running Monday morning at less than 70 cents per share. This hits hard not only small shareholders – who can always sell their shares – but also, for example, pension funds. And it may not be over, as the stock price continues to fall.

4. Do you have shares in UBS?

Monday, the merger clearly did not reassure the markets, European stock markets opened lower while Asians also ended lower. And the action of UBS, which will become an unprecedented banking giant, lost nearly 13% around 9 a.m. on the Swiss Stock Exchange. To see if the markets will recover. Note that UBS has paused its share buybacks.

5. Do you have obligations at Credit Suisse?

Holders of Credit Suisse bonds, worth $17 billion, will lose their investments after the bank is taken over by UBS. This was discovered by the “Financial Times” late Sunday evening. Indeed, the Financial Supervisory Authority FINMA has ordered Credit Suisse bonds worth 17 billion Swiss francs in the AT1 category, a class of relatively risky bank debt, to be reduced to zero.

6. What will happen to my mortgage?

Nothing should change. Interest will simply be due to UBS.

7. Are you a CS employee? Your bonus will be paid

Apart from the shareholders, it is the employees of CS who will be the main losers of this merger. At the end of 2022, Credit Suisse employed 16,700 people in Switzerland and nearly 50,500 worldwide. Between 5,000 and 10,000 people are expected to lose their jobs, according to analysts. Jobs could also jump at UBS, according to Stéphane Garelli, economist and professor at IMD invited Monday in La Matinale de la RTS.

But for now, the CS maintains the payment of its bonuses, despite the redemption. Management has sent an internal letter to employees asking them to come to work on Monday like any other day. And who says the next bonus round on March 24 would not be affected. In some countries, the premium has even already been paid. In addition, future salary increases will also be carried out as planned.