Wednesday, July 17, 2024

UBS shortlists four consultants for Credit Suisse integration

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UBS has whittled down its shortlist to 4 administration consultants to advise on its integration of rival Credit score Suisse, in what is predicted to be one of the crucial profitable monetary companies advisory contracts lately.

Swiss financial institution UBS is about to determine whether or not to award the contract to Bain & Firm, Boston Consulting Group, McKinsey or Oliver Wyman within the coming days, in line with individuals concerned within the course of. Smaller contracts might be awarded at later dates for extra specialist work, stated the identical individuals who warned UBS may determine to reopen the method.

UBS executives invited bids from administration consultants within the days following its settlement to rescue Credit score Suisse in a historic $3.25bn deal that was orchestrated by Swiss authorities.

The duty of bringing collectively for the primary time two world systemically essential monetary establishments is predicted to take a number of years and be fiendishly difficult.

The mixed group may have 120,000 employees globally, however tens of hundreds of job cuts are anticipated.

This week, UBS chair Colm Kelleher changed chief government Ralph Hamers along with his predecessor Sergio Ermotti in recognition of the size of the problem of creating the transaction successful.

“That is the most important single monetary transaction since 2008,” Kelleher informed reporters. “That brings with it important execution threat.”

Ermotti, who formally begins on Wednesday, is predicted to have a say on which advisor is chosen, although the mixing course of is being led by chief data and digital officer Mike Dargan.

Claiming the contract might be a boon for the successful bidder, at a time when banks are typically slicing again on their spending on exterior consultants.

Final 12 months, UBS focused lowering its spending on exterior advisers as a part of a pre-takeover drive to chop $1bn of prices by the top of this 12 months.

In recent times, UBS has employed McKinsey to assist Hamers develop his technique for the financial institution, which was unveiled final 12 months, and to implement an agile working technique, which is aimed toward rushing up decision-making. Some senior bankers have expressed concern about UBS creating an over-reliance on the agency.

Equally, the financial institution used consultants from Oliver Wyman to advise on its threat administration operations and BCG for some smaller tasks, in line with individuals accustomed to inner workings.

Credit score Suisse had additionally been making an attempt to cut back its use of exterior advisers, which included a plan to halve spending on consultants final 12 months. It decreased its exterior advisor headcount by a fifth within the ultimate quarter of 2022. It relied on recommendation from McKinsey for its two latest restructuring plans — one beneath former chair António Horta-Osório and the opposite from final 12 months that aimed toward radically reforming the enterprise.

As a part of the accompanying cost-cutting plans, Credit score Suisse sought recommendation from Oliver Wyman and BCG, whereas Deloitte supplied enter on the financial institution’s pay coverage, in line with individuals with information of their involvement.

UBS, Bain, BCG, McKinsey and Oliver Wyman declined to remark.

Extra reporting by Michael O’Dwyer

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