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Mid-August is D-Day. Next, UBS boss Sergio Ermotti (63) wants to explain what the merging big bank will definitely look like. Then it will become clear whether the Swiss unit of Credit Suisse will exist. Whether it continues as an independent bank or not, it will acquire its IT systems from UBS in the future. Several sources confirm this.
What will happen: All Credit Suisse processes and data will be migrated to UBS servers and databases. But what happens after the completion of possibly the largest IT project Switzerland has ever seen? Then not only would tens of thousands of servers and workstations be shelved, but there would be no need for the armies of computer scientists and system administrators running CS’ massive machine park.
Freiburg Central Councilor Isabelle Chassot (58) reported this week about the first regular meeting of the PUK – or better: no information provided. She didn’t want to say who the commission would call and what documents politicians could see, referring to the requirement of secrecy. But it can be assumed that they will read the most explosive reports. For example, classified Finma reports on various enforcement procedures at the big bank.
Despite or perhaps because of the information ban, this or that explosive detail is likely to reach the public. “A flood of thoughtlessness is expected,” says a person close to the PUK. It wouldn’t surprise anyone.
Freiburg Central Councilor Isabelle Chassot (58) reported this week about the first regular meeting of the PUK – or better: no information provided. She didn’t want to say who the commission would call and what documents politicians could see, referring to the requirement of secrecy. But it can be assumed that they will read the most explosive reports. For example, classified Finma reports on various enforcement procedures at the big bank.
Despite or perhaps because of the information ban, this or that explosive detail is likely to reach the public. “A flood of thoughtlessness is expected,” says a person close to the PUK. It wouldn’t surprise anyone.
It’s not clear whether the merger will lead to a business carnage in IT, as some observers suspect. It can also be completely different, it can be heard from inside the bank. One well-informed source says it’s clear there will be layoffs, but about half of the roughly 4,000 IT workers at CS in Switzerland could continue to work at UBS.
This is because around half of the IT professionals at UBS are not permanent employees. These are so-called contractors hired by large IT outsourcing companies. Because the experience with this model was simply not good, many large companies began to increase the proportion of their employees again.
UBS would be foolish to miss this opportunity
So is UBS. According to sources, UBS’s top IT chief Mike Dargan, 45, was instructed to increase the proportion of in-house IT professionals to 70 percent. With the takeover of Credit Suisse, UBS has a pool of IT cracks to pull from. It would be downright stupid for the bank to miss this chance.
The consolidation of computing platforms was discussed years ago. Tidjane Thiam (60) and Sergio Ermotti, then chairman of Credit Suisse, showed interest in establishing a joint “transaction bank” as early as 2016. However, negotiations between the bank bosses ended in failure.
Problem: One of the big banks would have to delete their IT information. Neither UBS nor Credit Suisse wanted this. Today the situation is radically different. Credit Suisse actually fell below zero as a result of the takeover deal at a dumped price and the AT1 bonds being declared worthless.
In particular, CS-Informatik is merging with UBS Business Solution AG. This is becoming one of the most important corporate divisions of UBS, with tens of thousands of employees. All subjects come together with him. Provides IT and business services for asset management, investment bank, asset management and Swiss business.
The monstrous merger of two giant IT departments will open up many costs. The faster they are combined, the faster it will make itself felt. According to well-informed sources, running CS IT alone costs around two million francs per day. If it is possible to integrate the systems in two years instead of four as planned, approximately CHF 1.5 billion will be saved. So speed is key.
40 percent cost savings
The synergies are huge. The costs of the entire system should not have been much higher for the operation of UBS than it is today. Well-informed estimates show that up to 40 percent of combined IT costs can be saved. This corresponds to about two billion Swiss francs per year.
One source says that after consolidating their IT systems, UBS Business Solutions AG may also offer IT services to other banks. In such a case, opening of UBS Services AG to other shareholders may be considered. An IPO may also be considered.
Consolidation of IT systems is independent of the decision whether CS Schweiz remains independent. If the Swiss retail and corporate client business is fully integrated into UBS, there will be dramatic layoffs in Switzerland. This will be significantly larger than layoffs due to the consolidation of IT systems.
* Journalist Beat Schmid writes about finances in the Sunday newspaper Blick. He is the editor of the Tippinpoint.ch online environment.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
