UBS prepares to cut 35,000 jobs as part of Credit Suisse takeover – 06/28/2023 at 11:06

(AOF) – UBS Group AG plans to cut more than half of the 45,000 jobs in Credit Suisse Group AG from next month, following the takeover of the bank under pressure from the authorities, reports Bloomberg. The new group employs 120,000 people and nearly 30% of positions would be cut, which represents around 35,000 jobs, sources familiar with the matter told the media.

Staff have been told they can expect three rounds of job cuts this year, with the first scheduled for the end of July and the other two for September and October.

Bankers, traders and support staff at Credit Suisse’s investment bank in London, New York and parts of Asia are expected to be hardest hit by the cuts, with nearly every business at risk.


The negative effects of rising interest rates

The rise in interest rates normally causes an increase in bank income through the loans granted. In Europe, according to a survey conducted by S&P among 85 banking establishments, the sector expects an average increase of 18% in its net interest income. However, this new inflationary context also has undesirable effects, in particular an increase in refinancing costs. It is also accompanied by the fear of a new recession, which would then affect all the bank’s businesses, ranging from loans to asset management, whose income is correlated to market valuations. Reassuring element: the banks of the euro zone are sufficiently solid to face a deterioration of their environment.

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