UBS, a big bank from Switzerland, bought another bank called Credit Suisse in a rush. They want to save $13 billion by 2026, which is $3 billion more than they planned. They’ve already cut costs by $4 billion by laying off workers. Let’s delve into what’s been going on and what it means for employees and the company’s future.
DiscontinuedNews is impartial and independent, and every day, we create distinctive, world-class programs, news, and content that inform, educate and entertain millions of people worldwide.
Last year, UBS laid off over 16,000 people, mostly from Credit Suisse. More layoffs might come after they finish merging the banks by the middle of this year.
UBS lost $279 million from October to December last year, the second time they lost money in a row. Their boss, Sergio Ermotti, thinks they’ll do better in the first quarter of this year.
UBS bought Credit Suisse last March for $3 billion with help from Swiss authorities. Since then, UBS has gained $77 billion more in wealth management and deposits. They want to grow in the United States, especially in investment banking, using the bankers they got from Credit Suisse.
In 2023, UBS made a profit of $29 billion, mainly because they bought Credit Suisse at a low price.
UBS will start paying dividends again and buying back some of its shares. They stopped doing this after buying Credit Suisse but are starting again.
Sergio Ermotti, the boss of UBS, says 2024 will be an important year for the merger with Credit Suisse. They’ll merge their computer systems, which is risky because they operate in over 50 countries.
About UBS
UBS is a well-known bank from Switzerland, and it’s the biggest one there. It started a long time ago, in 1862, as the Bank of Winterthur. But then it merged with another bank in 1912 to become Union Bank of Switzerland (UBS). Later, in 1998, it merged with another big bank called Swiss Bank Corporation (SBS). Now, it’s just called UBS.
UBS doesn’t just operate in Switzerland; it’s in many other countries, too. In 2021, it had around 3 million customers in Switzerland alone. Services it offers include:
- Savings
- Checking accounts
- Investment funds
- Mortgages
If you want to do your banking with UBS, you have a few options. You can use their website or mobile app, or you can go to one of their offices.
One good thing about UBS is that everything is available in English. Due to this, it is handy if you don’t speak one of Switzerland’s national languages.
UBS’s Banking Packages:
They have one called UBS Me. It comes in different versions depending on your situation, like if you’re a student or if you work across borders. Each version has the same features, but the prices vary a bit.
With UBS Me, you get a private account, savings accounts, and a debit or credit card. They have options for different types of customers, like young people, families, and individuals.
But, like most banks, UBS charges fees for their services. For example, their standard banking package costs $13 per month or $18 if you want paper statements instead of electronic ones. If you have more than $10,000 in your account or a mortgage with UBS, you get a discount.
You can also choose a cheaper option called the Personal Account, which costs $5 per month or $3 if you have more than $10,000 in your account. But with this account, you don’t get a card.
Overall, UBS has a lot of options for banking. But you’ll need to pay attention to the fees to make sure you’re getting a good deal.
Credit Suisse Crisis: What Happened and How Did UBS Step In?
In March 2023, Credit Suisse faced big problems. Over three years, it got caught up in spying on its workers, lost a lot of money from a company collapse, and got tangled with another troubled firm. Their boss tried to fix things in November 2022, but it didn’t work.
Then, on March 9th, Credit Suisse had to delay sharing its financial report because the government had worries about the numbers. The stock price went down a lot after that, hitting a record low on March 13th. People were pulling their money out of the bank, too.
Things got worse on March 15th when a big shareholder said they wouldn’t put more money into Credit Suisse because of a rule. That made the crisis even worse. The government had to step in and promise to help the bank.
On March 16th, Credit Suisse said it needed help from the Swiss government. The stock price went up a bit, but the problem wasn’t solved.
By March 17th, there were rumors that UBS might take over Credit Suisse. That weekend, they talked about it a lot, and on March 19th, they agreed on a deal. UBS would buy Credit Suisse, which stopped the crisis from getting worse.
After that, the Swiss government said Credit Suisse couldn’t give bonuses to its workers. And on March 29th, a new boss took over at UBS. He said he took the job because he felt it was his duty.
Is UBS Still Safe?
If UBS were to go bankrupt, customers would be protected by up to 100,000 Swiss francs by the Esisuisse deposit protection scheme. However, since UBS has millions of customers and Esisuisse has a limit of 6 billion francs, each customer might only get about 2,000 francs if UBS fails. This is a downside of Esisuisse because big banks like UBS are less protected than smaller ones.
But back in 2008, during the financial crisis, UBS almost went bankrupt. Besides, the Swiss National Bank bailed them out with 60 billion francs. Now, UBS is seen as “too big to fail,” meaning it’s vital for the economy and has stricter rules to prevent problems. However, this doesn’t guarantee they won’t fail again, but it’s considered safer than before.
UBS takes security seriously, offering many ways to keep your money safe online. While it’s generally safe to bank with UBS, it’s not the safest option. They offer various accounts to suit different needs. But they can be more expensive compared to other banks.
What’s the Latest on UBS’s Acquisition of Credit Suisse and Its Impact on Jobs and Finances?
UBS bought Credit Suisse to save money. They’re telling investors that they’ll do better financially soon. They plan to start buying back stocks again this year. Some people are losing their jobs because of the Credit Suisse deal. But other companies are also laying off because the economy is tough right now. UBS’s stock price has dropped by 4.8% recently.
UBS Financial Performance and Future Plans
UBS had some ups and downs in 2023. They reported a loss of $279 million in the last quarter. It was the second time they lost money since buying Credit Suisse. But for the whole year, they made a record profit of $29.0 billion, mostly because of the Credit Suisse deal.
The bank is cutting costs and laying off employees. By the end of 2023, they had already saved about $4 billion and cut 4,300 jobs. Now, they’re aiming to save even more money, targeting $13 billion in savings by 2026.
Despite the challenges, UBS is still attracting new customers and managing a lot of money. They had a net inflow of $22 billion in the last quarter, and since buying Credit Suisse, they’ve managed assets worth $3,850 billion.
UBS is also planning some changes for the future. They want to increase their managed assets to over $5,000 billion by 2028. And they’re merging with Credit Suisse to become even bigger, expecting to finish the merger by the end of the second quarter of 2024.
Overall, while there are some uncertainties ahead, UBS is focused on growing and making smart financial moves.
Companies That Are Similar To UBS
UBS is a company that helps people and businesses with their money. It’s been around since 1862 and offers financial advice and solutions to different kinds of clients, like individuals, big companies, and organizations. UBS has a lot of companies that are similar to UBS, let’s find out!
- Goldman Sachs is a company like UBS. It’s mainly about investing and managing money for people and businesses. They’ve been doing this since 1869.
- Merrill Lynch is another company that helps people with managing their wealth and provides various financial services. It started in 1914.
- Credit Suisse is similar to UBS but operated by a different group. It focuses on private banking and investment services. It’s been around since 1856.
- Pictet is an investment company that helps people invest their money wisely. It’s a private company founded in 1805.
- Deutsche Bank is a big company that offers different banking services for businesses and regular people. It’s been around since 1870.
- Banco Santander is a company that offers banking products and services to people and businesses. It started in 1857.
- Barclays is another company like UBS that provides various banking solutions for individuals and businesses. It’s been around since 1690.
- Rabobank is an international bank that operates based on cooperation principles. It offers different financial services and has been around since 1972.
The Final Takeaway
In short, the UBS layoffs were a big deal in the money world. The company had some tough times and had to make hard choices. But they’re trying to change and make things better for the long haul. They’re cutting back on how they work and spending less money to stay in the game and help their customers. Even though laying off workers is sad, sometimes it has to happen so companies can keep growing and doing well in a busy market. UBS is going to keep dealing with challenges, working efficiently, and doing their best to give great money services to their customers everywhere.
