After the bankruptcy of the major Swiss bank Credit Suisse (CS), the task now is to limit the loss of reputation. After the debacle of the second largest Swiss bank, many people lost confidence in the financial sector there. There is now a strong fight for one customer group in particular: the upper billionaires. Switzerland’s status as a bank for the super-rich is not “given by God,” said the head of Swiss bank Julius Baer, Philipp Rickenbacher, in an interview with the Financial Times on Monday with quasi-religious words. His demand: The Swiss government and the supervisory authorities must communicate better with the concerned international investors.
You certainly don’t do Julius Baer an injustice if you suspect a healthy dose of self-interest in these words. The rich customers of Credit Suisse and all other institutions are very lucrative due to their high fee payments. But they only stay in Switzerland with their money if they can be sure that Switzerland is still the old Switzerland: a place where the wealth of rich people can be safely and lucratively stashed away, if necessary also veiled behind complex company structures – so as to leave the ownership of the individual in the dark. Bank Julius Baer, proud 133 years old, manages around 424 billion francs for wealthy private individuals worldwide.
“It is obvious that the presence of Swiss banks in the international press is increasing this pressure”
Julius Baer CEO Rickenbacher said wealthy clients are pulling out of UBS and Credit Suisse because their business models include riskier investment banking activities. They would rather switch to traditional, more conservative Swiss banks. “It is obvious that the presence of Swiss banks in the international press is increasing this pressure and we as Swiss bankers have to react to it.” That could mean: Julius Baer will be the beneficiary of the Credit Suisse scandal. Otherwise, poaching is already taking place. The institute is conducting “constructive talks” with Credit Suisse employees who want to leave their bank after the takeover by UBS, Rickenbacher said.
According to a report in the Sunday newspaper, UBS is planning extensive job cuts with the takeover of Credit Suisse. The workforce of the merged banking group could shrink by 20 to 30 percent, writes the paper, citing informed circles. According to the information, up to 11,000 jobs could be lost in Switzerland and 25,000 to 36,000 jobs worldwide. Headhunters around the world have reportedly received many calls from Credit Suisse bankers looking for a new job.
Rickenbacher sees the takeover of CS by UBS, which was engineered by the Swiss authorities last month, as a Herculean task. It will require a lot of resources and efforts in Switzerland and is very complex. It is also problematic that CS was saved from bankruptcy at the last second. Rickenbacher believes that a private institute should be able to fail.