By John Revill
(Reuters) -UBS will have an “incredibly high bar” on investment banking staff it takes on from Credit Suisse following the merger of the two banks, UBS Chairman Colm Kelleher said on Wednesday.
Kelleher told a WSJ event in London he wanted to maintain the culture at UBS following the takeover of its stricken Swiss rival, saying it was clear that the investment bank at Credit Suisse was “out of control.”
“I think Credit Suisse is culturally challenged in the investment bank so we have to be very careful about – I use the term culture filter – who we bring in,” Kelleher told the event.
He reiterated that UBS did not want the tie-up, which was arranged hastily over one March weekend by the Swiss authorities to stave off a broader banking crisis.
“We are worried about ‘cultural contamination’. We are going to have an incredibly high bar for who we bring in to UBS.”
Kelleher said the main problem at Credit Suisse in the run up to its failure had been the investment bank, which had absorbed huge amounts of capital into what he called “sub optimal products.”
“A bit like Japanese knotweed, at Credit Suisse the investment bank grew out of control and absorbed all this capital,” Kelleher said.
As a result UBS would significantly downsize the investment bank operations following the takeover, he said.
Credit Suisse’s other three businesses would prove much less problematic, he added, with its universal bank enjoying a strong reputation in Switzerland, while the asset management business was small enough to be easily absorbed.
Credit Suisse’s global wealth management business could also be integrated quite efficiently, he added, because the head of the UBS business – Iqbal Khan – previously lead it before switching to UBS.
UBS has said it aimed to finalise the deal in coming weeks while the full integration of Switzerland’s top two lenders could take three to four years.
“We will close the deal very shortly,” Kelleher said on Wednesday.
(Reporting by John RevillEditing by Tomasz Janowski)