In Switzerland, the balance sheet of banks fell 6.9% to 3,339.7 billion Swiss francs (USD 3.76 trillion) in 2022, said the Banking Barometer, which talks about the annual report on banking industry trends.

“The downturn among the big banks was especially large and probably driven mainly by shifts in customer funds at Credit Suisse,” the report said.

“Credit Suisse’s high liquidity requirements were also seen as playing a part in sight deposits held overnight at the Swiss National Bank falling more sharply in 2022 than in the previous ten years,” the study noted further.

“There was a certain amount of rotation into time deposits, but a large share of the decrease was caused by shifts in customer funds at Credit Suisse in October 2022,” it concluded.

The Swiss Bankers Association also acknowledged that Credit Suisse’s collapse and subsequent takeover by UBS have raised questions over the potential damage to the Swiss banking industry’s reputation.

Meanwhile, the head of Switzerland’s financial watchdog FINMA has resigned nearly six months after the body drew heavy criticism for failing to prevent Credit Suisse’s collapse.

Urban Angehrn will step down at the end of September 2023, FINMA has said in a statement.

“Being able to contribute to the sustainable improvement of the quality of the Swiss financial centre as CEO of FINMA was a unique challenge for me, and one that I tackled with all my might. However, the high and permanent stress levels had health consequences. I have considered my decision carefully and have now decided to step down,” Angehrn said.

FINMA came under scrutiny for not halting the string of scandals at Credit Suisse, whose collapse-like crisis in March 2023 led to a liquidity crisis.

The stricken bank was eventually bought by UBS in a state-engineered 3 billion Swiss franc (USD 3.37 billion) rescue. However, the acquisition, the biggest banking deal since the 2008 financial crisis, has triggered scores of legal cases brought by disgruntled investors who lost money when bonds were wiped out or were unhappy with the exchange ratio for their stock.

FINMA’s Deputy CEO Birgit Rutishauser will act as the watchdog’s interim CEO from October 1.

Meanwhile, UBS will absorb Credit Suisse’s Securities Research service in September 2023, thereby wrapping the business into its own research operations, the bank said in a letter seen by Reuters on Tuesday.

Institutional customers will now be switched to UBS Global Research while Credit Suisse’s Wealth Management clientele will not be affected by the transition as they have access to UBS IB Research, a UBS spokesperson told the media.

Credit Suisse will also reduce the volume of new markets business from September 22 as UBS moves to wind down trading in global securities at its former rival.

The post Credit Suisse collapse results in balance sheet contraction of Swiss banks: Report appeared first on International Finance.

The job cuts are equal to 2 percent of the $2.5 trillion wealth management’s global workforce, the reports said.  An internal memo was sent to UBS wealth management employees earlier this week. The memo informs employees of the division of the bank’s operations into three parts. UBS’ operations in Europe, the Middle East and Africa will be divided into Europe, Central and Eastern Europe, the Middle East and Africa. 

Previously, UBS had announced that its investment bank restructuring would cost $100 million. UBS wealth management bosses Iqbal Khan and Tom Naratil, said in the memo, “To deliver on these opportunities we are pleased to announce that we will accelerate decision-making and time to market by delayering, reducing organisational duplication, and increasing business unit (BU) autonomy, which comes with more accountability.” 

The bank’s current EMEA head Christine Novakovic will continue to control the European business, while Caroline Kuhnert will lead Central and Eastern Europe business and Ali Janoudi will take over the Middle East and Africa units. 

Also, the bank will expand its Global Family Office to improve offerings for ultra-high net worth and high net worth clients. UBS has set an ambitious target to make $20 billion to $30 billion in new net loans to ultra-rich clients annually. 

UBS plans to roll out new technology and increase incentives across its global wealth management. 

The post UBS to cut 500 jobs equal to 2% of global wealth workforce appeared first on International Finance.