UBS cuts jobs in Asia amid slowing activity

Months after completing its acquisition of competitor Credit Suisse, UBS Group AG is laying off hundreds of employees in Asia as a response to weak customer demand and China’s faltering economy, according to a report by The Economic Times.

According to the sources familiar with the matter, the largest bank in Switzerland has recently slashed some redundant posts and more are anticipated through November.

Relationship managers will be among the posts that will be eliminated by the lender in Singapore and Hong Kong, most of them in teams that have just been purchased from Credit Suisse, according to the sources. They said that the number of cuts has not yet been decided. According to one of the sources, the lender intends to keep the majority of its private bankers in Australia and India for the time being.

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In the Asia-Pacific area, where Singapore and the regional commercial capital of Hong Kong have traditionally served as booking hubs for China’s ultra-wealthy, UBS is fighting low consumer demand and activity levels. The region’s profit before tax for the wealth management division decreased by 9 per cent in the second quarter compared to the same period last year.

On Monday, UBS shares gave up early gains and were trading at 22.73 Swiss francs ($25.493) in Zurich at 11:18 a.m.

As pandemic precautions and a real estate crisis impacted the nation, the second-largest economy in the world grew by 3 per cent last year, one of its weakest rates of expansion in decades. After it finally reopened, there was some optimism that China might rebound this year. However, the recovery has stalled, and the benchmark stock index is on pace to post losses for a third consecutive year.

After acquiring Credit Suisse in June, UBS has set huge integration goals for its former rival, including the elimination of 3,000 domestic jobs and the achievement of cost savings of more than $10 billion.

The headcount cuts coincide with those made by major banks like Barclays Plc and Goldman Sachs Group Inc. According to Bloomberg, as part of the layoffs, Barclays aims to fire around 5 per cent of the client-facing employees in the trading sector as well as certain dealmakers globally.

The smaller Swiss company was acquired by Zurich-based UBS after an emergency government-brokered deal for 3 billion Swiss francs ($3.4 billion).

In a wager on the region’s valuable clients, Bloomberg had earlier reported that Asia could be designated as one of the regions to be spared significant cuts. According to information from Asian Private Banker, UBS had 850 private bankers in the region at year’s end, compared to 580 for Credit Suisse.

Yet, even senior bankers were leaving steadily. According to the record maintained by the Monetary Authority of Singapore, Gautam Anand, a managing director in Singapore who was hired from Credit Suisse last year, is no longer employed by UBS. He began working with UBS in January as part of initiatives to improve services for the affluent diaspora of India.

Moreover, Martin Loh of Credit Suisse, Joe Lau, the market group head for China, as well other bankers have recently left Hong Kong.

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