UBS management warns that it will take up to four years to close the merger with Credit Suisse

The enormous complexity of merging two global and systemic banking giants like UBS and Credit Suisse will cause the operation to close between three and four years. This was explained yesterday by the president of UBS, Colm Kelleher, at a rare meeting of shareholders dedicated to explaining the merger, on which attendees did not have the opportunity to vote. “There was no time for consultation,” excuses the leader.

The bank’s leadership came to the meeting with investors under additional pressure from the strong tensions experienced a few hours earlier at the Credit Suisse shareholders’ meeting, where the minority shareholders showed their absolute rejection of the merger. For this reason, Kelleher focused his message on defending “a historic agreement, but one that we never wanted to achieve.”

“The transaction represents a new beginning and great opportunities for the merged banks as well as for the financial center of Switzerland,” he said. Some meaningful words after criticism of the country’s banking system’s disrepute that led to the downfall of Credit Suisse after years of scandals and red numbers.

During his speech, Kelleher insisted that the systemic importance of the merged entity will be a major challenge for the entity appointed Sergio Ermotti as the new CEOreplacing Ralph Hammers who held that position until now.

Promote private banking

The big challenge will be to minimize the business investment banking (so that it does not make up more than 25% of the activity) and focus on expansion in the segment high net worth. Although Kelleher indicated that it was “premature to speculate about possible layoffs,” it is estimated that the entity will have to seriously cut 36,000 jobs.

Then we will have to define a strategy. For now, the Credit Suisse brand is expected to remain operational for at least some time. And a proposal will be made to the committee Dividend increase of 10%., up to 55 cents per share. Of course, after the Credit Suisse acquisition, UBS will suspend its share buyback program — another formula used by companies to reward their investors.