Credit Suisse is shutting its cash equity sales business in Japan, and has told hedge funds and other institutional clients it would no longer be taking orders as UBS Group AG proceeds with a global overhaul.
(Bloomberg) — Credit Suisse is shutting its cash equity sales business in Japan, and has told hedge funds and other institutional clients it would no longer be taking orders as UBS Group AG proceeds with a global overhaul.
A number of staff in Tokyo are leaving as part of process, according to people with knowledge of the matter. Credit Suisse’s investment bank arm has already exited from stock underwriting in the country, the people said, declining to be identified as the deliberations are private. Both UBS and Credit Suisse declined to comment.
The purchase of Credit Suisse has increased UBS’s workforce to about 120,000, which Switzerland’s largest bank intends to ultimately cut by about 30%, Bloomberg has reported, and it’s considering slashing two-thirds of investment bankers in Asia-Pacific.
Shares in the Swiss lenders were up 0.44% at 11:10 a.m. in Zurich.
The Japanese securities unit had 421 employees as of March this year, according to local filings. It has also been offering foreign exchange trading among other services such as wealth management. It is unclear about the fate of Credit Suisse’s other businesses in the country.
UBS has shown little appetite for Credit Suisse’s investment bank since the government-brokered deal was announced in March. The bank said it would continue its own strategy of a smaller capital-lite securities unit, and would only use Credit Suisse’s investment bank to reinforce their global business while managing the rest down. The bank has said it aims to reduce staff costs by about $6 billion over the next several years.
UBS is due to release more detailed information around its strategy along with second-quarter results for the combined banks on Aug. 31. This month, UBS announced that it was terminating an agreement with the Swiss government in which the state guaranteed up to $10 billion of losses that could stem from the acquisition of Credit Suisse assets.
–With assistance from Tom Metcalf.
(Adds share price, timing of results announcement)
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