UBS will be cutting another $1.1bn from employment costs this year
Today's fourth quarter results from UBS bring good news. In its own words, the bank is busy "executing final stages of integration to capture synergies." The integration of Credit Suisse is nearly over.
It is not, however, over completely.
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Although 73% of applications have been decommissioned, although the 'CS legacy IT infrastructure wind-down and legal entities integration' is "materially complete", although $13bn has already been spent integrating Credit Suisse and even $10.7bn of cost savings have been squeezed, there are more costs to come out this year.
UBS said today that it intends to extract a further $2.8bn from costs in 2026. 40% of this is to come from people: $1.1bn will be removed from the compensation line across the bank. Heads will roll.
Who will go?
Maybe not the investment bankers, who are tasked with doubling revenues from the 2022 level by the end of 2025. Last year, UBS's M&A revenues were 10.5% while capital markets revenues fell by 7%. This year, CEO Sergio Ermotti said he's hopeful that IPOs will drive stronger revenues in ECM.
Maybe not UBS's equities sales and trading professionals, who achieved a "record share" in cash equities and a strong performance in prime and equity derivatives.
Maybe not the bank's FX or precious metals traders, who it says had a strong 2025. Nor the bank's rates traders, who already look a little diminished.
Maybe not the technology team working on the integration. Although most has been done, Ermotti said today that the final stretch will be the hardest to achieve.
Within the investment bank at least, then, it might be mostly middle and back office people who suffer. The bank has the standard "portfolio of large scale AI programs" which are intended to "unlock" efficiencies and cost savings. The key is turning on process-oriented jobs.
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