After Credit Suisse was acquired by UBS, there may be a wave of layoffs.

(Reuters)

[Financial Channel/Comprehensive Report] After Credit Suisse was incorporated into UBS, which department was the worst?

Economists expect the bloodiest cost-cutting action to take place in the investment banking division, which means most of Credit Suisse's traders face job losses, and risky businesses that have always been troublesome may be sold, only those banks with excellent credentials Home can keep jobs.

The Economist reports that the chairmen of Swiss financial rivals Credit Suisse and UBS have announced an important but unpleasant merger.

After a weekend of haggling, UBS merged with Credit Suisse for 3 billion Swiss francs, officially ending a 167-year-old bank and ushering in a turbulent new era for global finance.

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The report believes that the merger of the two banks is a painful thing. UBS plans to cut billions of dollars, hoping that the transaction will be profitable before 2027, which directly ignites the anger of UBS shareholders.

A week ago they owned a revamped, profitable bank, and now they own riskier stocks with no one listening to their concerns.

However, the positive aspect of this merger is the combination of the bank's wealth management and Swiss banking operations. After the merger, these two departments will become one of the market leaders.

UBS's domestic market share in Switzerland will approach one-third, and its wealth management business is a shining gem. The average return on equity (ROE) of this business in the past five years is as high as 24%, which is impressive.

Combined, the unit will manage $3.4 trillion in assets, giving it a place in the wallets of the world's billionaires.

As for the area that may cut staff after the merger, investment banking will face the bloodiest cost-cutting action. Most of Credit Suisse's traders are in unemployment crisis, and only those bankers with the best qualifications can survive.

According to the report, the total assets of UBS and Credit Suisse are about twice the GDP of Switzerland. Considering the importance of the new large banks to the global economy, regulators will insist on higher capital adequacy ratios, which may erode profits.

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