Making one out of two big banks is extremely challenging, says Marius Fuchs. It will be a year-long process.
For UBS and Credit Suisse to merge into one, efforts will be needed in many areas. In an interview, fusion expert Marius Fuchs says which phases are imminent and where the pitfalls lie.
SRF: How long will the takeover process take?
Marius Fuchs: Such a process is never complete. Restructuring is actually normal – it’s about improving or at least maintaining the competitiveness of companies. Here we have a very extraordinary case of two big banks that were forced into marriage over a weekend and now have to find each other. Accordingly, we will see: There will be different phases and it will take many years.
What phases is UBS facing?
The first phase will be a cost reduction phase. There will be many layoffs. In a second phase, the various products, areas and also the different IT systems in the stores will be brought together. And in a third phase, you try to bring the whole thing together internally and externally in the market. Perhaps the Credit Suisse brand will slowly disappear and in a few years it will no longer be present at all.
Maybe the top cracks aren’t the ones you want to build on.
In terms of staff, a gigantic restructuring is imminent. On the one hand, the company wants to get rid of staff, on the other hand, it doesn’t want to lose the top decision-makers. How can it manage this balancing act?
The question is: are the top cracks really the ones you want to build on? Maybe it’s the younger ones or people in certain niches that you absolutely need. If you look five or ten years ahead, there has to be a bank where you have a sense of togetherness and loyalty to your employer – a bank where you feel comfortable.
How does UBS have to bring the different corporate cultures together?
Bringing two cultures together is always difficult. We have different management styles. A UBS is managed more hierarchically. At Credit Suisse you could do even more. Now that wasn’t very successful. Accordingly, the questions now are: Does a new culture have to emerge and what would it look like? It should be noted that UBS is in the lead.
Where is the greatest synergy potential?
We have two banks that have a similar structure and similar products. There are two people or two teams for everything. One example is payment transactions. We still have a high degree of automation there, which is continuing to grow. Another example is product development, where you can handle a lot more volume with a good team. But there are also areas that will grow. The IT sector in particular – a bank is largely an IT company. There will be great demand there, and many things will have to be newly integrated or newly developed.
The rate that such a process fails is between 50 and 70 percent.
How big is the risk that the takeover process will fail?
The rate that such a process fails – measured in terms of value destruction – is between 50 and 70 percent. This is historically known from such large companies. The risks are high. But you have to define what failure means. There must be no failure in the event that UBS stumbles. Every effort will be made to prevent this.
The interview was conducted by Marco Schnurrenberger.