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Credit Suisse and UBS are to merge in a deal announced overnight, with international reports suggesting that thousands of jobs could be at risk as the two businesses consolidate services.
Credit Suisse employs around 160 people in Guernsey, all based at their office at Les Echelons.
UBS is thought to employ around 150 people in Jersey.
Both firms offer broadly similar services with Trust, Banking and Investment opportunities for private clients.
While Credit Suisse called the deal a "merger", UBS announced that it has "acquired" the firm, and its CEO said Credit Suisse remains a competitor and that staff between the two firms should not be discussing business matters.
This came after the deal between the two firms was announced on Sunday night, following days of unease for Credit Suisse as major investors pulled out.
Things stabilised with a cash injection of "up to £44billion" by Switzerland's Central Bank but then last night Credit Suisse confirmed the 'merger' had been agreed following the intervention of the Swiss Federal Department of Finance, the Swiss National Bank and the Swiss Financial Market Supervisory Authority FINMA (FINMA).
Credit Suisse crisis latest:
— Bloomberg (@business) March 20, 2023
- European banking stocks fall at open
- HSBC, StanChart slump in Asia
- Holders of risky bonds face $17 billion wipeout
- Fed, global central banks move to boost dollar funding
- Thousands of jobs at risk
Live updates: https://t.co/uxEFl2NUTK pic.twitter.com/QiygrqiU31
It was also confirmed that once the merger has been fully completed, UBS will be the "surviving entity" bringing to an end the decades long dominance of Credit Suisse in the European Financial markets. "Until consummation of the merger, Credit Suisse will continue to conduct its business in the ordinary course and implement its restructuring measures with UBS," said the official announcement.
It also stated that UBS has "expressed its confidence that the employment of the staff of Credit Suisse will be continued".
However, both locally and Internationally, doubt has already been cast upon that pledge with Bloomberg reporting that "thousands of jobs (are) at risk".
It quoted the boss of Credit Suisse saying yesterday it was a "sad" and "difficult" day, while the CEO of UBS warned staff at the two firms "not to talk business matters', as "the two remain competitors until the deal closes".
UBS has acquired Credit Suisse. UBS in Jersey employs about 150. Credit Suisse in Guernsey employs about 160. Read the writing.
— Charles Parkinson (@dep_parkinson) March 19, 2023
Guernsey's Deputy Charles Parkinson also sounded the alarm bell for employees.
The island's former Treasurer and Economic Development Minister highlighted the presence of the two competing but merging firms in Guernsey and Jersey.
He told his followers to "read the writing".
There have been recent examples of businesses consolidating teams with Jersey being chosen as the preferential location for services over Guernsey.
In finance, RBC announced earlier this year that 89 staff are to lose their jobs in Guernsey as roles are relocated to Jersey or elsewhere, while in other sectors the Islands Energy Group recently put staff in Guernsey and the Isle of Man on notice of eight redundancies, while jobs were said to be safe in Jersey. And 90 staff lost their jobs at manufacturing firm Intersurgical when their work was relocated further afield last year. The Guernsey site was closed after most of its manufacturing work had been relocated to Lithuania where it was said to be cheaper to operate.
Questions remain over Credit Suisse future
Crisis hit Credit Suisse borrows £44b+
Credit Suisse plans major restructuring
Butterfield buys Credit Suisse Trust
Credit Suisse appoints new Guernsey CEO and Branch Manager
Credit Suisse makes senior management appointments
Five redundancies at Credit Suisse Trust
Three promotions in Credit Suisse's Guernsey office
Credit Suisse Trust celebrates 40 years in Guernsey
School leaver programme signs first recruit
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