NATIONAL UNIVERSITY OF SINGAPORE
SEMESTER 2, AY 2022/2023
Individual Take-Home Test
MNO1706A Organisational Behaviour
Date: 8 April 2023 (Saturday)
Time Allowed: 8 Hours (9 am – 5 pm)
INSTRUCTIONS:
1. This assessment component contains TWENTY (20) printed pages including this page.
2. There are TEN (10) published reports to read with ONE (1) question. The question
carries THIRTY (30) marks for a total of THIRTY (30) marks.
3. Please type your answers in a Word file and upload it to the file folder, CANVAS >>
MNO1706A >> Assignments >> Individual Take-Home Test, by 5.00 pm today.
4. This is an OPEN-BOOK assessment. You may refer to any relevant materials.
1
Individual Take-Home Test
Published Report A: Yantoultra Ngui, Summer Zhen, and Selena Li (2023). Stunned
Credit Suisse staff fear uncertain future despite UBS rescue deal. 20 March 2023 16:52.
Reuters News. Copyright 2023 Thomson Reuters. All Rights Reserved.
Credit Suisse staff arriving to work in Asian financial centres on Monday morning fretted
about retrenchments and retaining business after larger Swiss rival UBS agreed to swallow
the 167-year-old bank in a state-backed rescue.
"I don't know if I get to stay, leave, or should I consider my options now?" said one
Southeast Asia-based banker, who like other staff spoke to Reuters on condition of
anonymity.
The banker also complained of pressure from clients to provide answers within 24 hours
to questions about the UBS deal.
Late on Sunday, Swiss authorities capped a tense week of markets by engineering a 3
billion Swiss francs ($3.24 billion) takeover of Credit Suisse by UBS, supported by billions
in state funding, while angering holders of risky bonds by writing down their debt to zero.
Credit Suisse employs 50,000 people globally across wealth management, investment
banking and asset management operations, with more than 150 offices in 50 countries.
Credit Suisse had been steadily losing wealth management market share to UBS and to
more well-capitalised U.S. banks in investment banking in the last few years, but
remained the second-biggest wealth manager in Asia, behind only its acquirer.
"It's an extremely sad day to see us ending our legacy this way," said one Singapore-based
senior employee in Credit Suisse's wealth management unit.
The bank told staff its wealth assets are operationally separate from UBS for now, but
once they merged, clients might want to consider moving some assets to another bank if
concentration was a concern, according to an internal memo.
Credit Suisse said it would still press ahead with its annual investment conference that
kicks off in Hong Kong on Tuesday, although media are no longer invited.
"I have no idea what it means to still continue 'business as usual' when we're not even
sure our job is going to be there," said one Hong-Kong-based employee.
As a giant wall backdrop as high as the ceiling with "Credit Suisse AIC" emblazed on it
glowed in a hotel lobby, the bank said its chairman and CEO would not turn up at the
event.
Credit Suisse shares plunged 60% in early trade on Monday, while UBS lost 15%, as early
investor optimism about official efforts to stem a banking crisis quickly evaporated.
2
Outside its office near Singapore's central business district, nearby coffee shops, usually
bustling with bankers from Credit Suisse and rivals, were less crowded early on Monday.
Some of the bank's employees brushed aside questions from Reuters journalists waiting
outside the office lobby.
UBS warned on Sunday that it would pare back much of Credit Suisse's investment bank,
which Credit Suisse had planned to spin off.
The Swiss Bank Employees Association on Monday called on UBS to keep job cuts to an
"absolute minimum".
UBS and Credit Suisse sources said Southeast Asia was among the regions where the
banks had the most overlap on the wealth management and investment banking teams.
"Investment banking stands out and that could be where the pain is felt most for Credit
Suisse," a senior executive at UBS said.
Credit Suisse is ranked 20th on the league tables for equity capital markets for the first
quarter in Asia Pacific including Japan, according to data from Refinitiv, with a 1.1%
market share.
Still, it remains a powerful equity capital markets entity in Southeast Asia's growing
markets and shares the second spot with a 9.3% market share, up from 3.2% a year
earlier. ($1 = 0.9257 Swiss francs)
Published Report B: Credit Suisse staff from Singapore to London out to find jobs. 22
March 2023. The Straits Times. © 2023 SPH Media Limited.
Recruiters across the world are getting an unprecedented flood of calls from Credit Suisse
bank employees seeking new jobs as the embattled Swiss lender is set to be taken over by
rival UBS.
From Singapore to London to New York, head-hunters and rival lenders have been fielding
calls over the past few days from anxious Credit Suisse workers, according to sources from
more than a dozen firms with knowledge of the matter.
One firm in Singapore on Monday alone handled questions from about 30 mostly Credit
Suisse private banking executives about available jobs, while another recruiter in Hong
Kong has been talking to more than 20 senior investment banking executives since last
week, the sources said.
A firm that is focused on managing director hires said it has received such calls since late
Friday, especially for jobs in the wealth area.
3
A head-hunter in London, where Credit Suisse employs about 5,500 people, according to
its website, said he was fielding calls all weekend, particularly from those in the equities
division, where the overlap with existing business at UBS is extensive.
However, the prospect of other firms going on a Credit Suisse-focused hiring binge is
unlikely as most companies would likely limit the number of hires.
In New York, one head-hunter said several thousand people at Credit Suisse had been
hoping to join Credit Suisse First Boston (CSFB) -- the investment banking spinoff at the
heart of the Swiss lender's earlier restructuring efforts.
That now looks unlikely to happen and many will be hoping to join UBS, said Mr Michael
Nelson, managing director of recruitment firm Quest Group in New York.
"If they aren't going to CSFB, they will have to be emigrated into UBS fixed income, which
is a much smaller business than Credit Suisse," he said.
"My guess is they will dismiss them and turn them out onto the street."
The flurry of calls highlights the heightened anxiety of Credit Suisse's employees amid a
takeover that has been described by UBS chairman Colm Kelleher as an emergency
rescue.
Their search for new opportunities, however, collides with a difficult job market, where
major banks from Goldman Sachs to Nomura Holdings are cutting roles.
"We are encouraging colleagues to continue to the best of their abilities against a difficult
backdrop," a Singapore-based Credit Suisse spokesman said in response to queries from
Bloomberg.
"Ultimately, we will do everything we can to ensure an orderly transition and to serve our
clients as best as possible."
UBS did not respond to an e-mail seeking comment.
Mr Will Tan, a managing director of Singapore-based recruiter Principal Partners, said the
number of Credit Suisse employees approaching the recruiter has intensified over the
past month, and the firm is seeing even more resumes now from the bank across Asia.
"The best ones at Credit Suisse have probably already left," Mr Tan said.
Noting the challenging environment for hiring, he added: "There is definitely not enough
to go around for everyone."
An Asian head-hunter, who declined to be named, said employees in investment
consulting, compliance, legal and audit would worry about their jobs, given duplications
with UBS, while relationship managers may be in a better position.
4
When announcing the deal, UBS chief executive Ralph Hamers said the combination
supports the firm's wealth management growth ambitions in the Americas and Asia.
He added that UBS looks forward to welcoming new clients and colleagues across the
world.
But UBS was clear there will be job cuts, with the investment bank it is inheriting likely to
be particularly impacted.
While no figure was given, a person familiar with the matter has estimated that the cuts
could be in the multiples of Credit Suisse's existing plans to shed 9,000 roles.
Several Credit Suisse alumni took to social media offering help and advice.
Others in the private equity world like Spartan Advisors are smelling opportunities to pick
up talent, asking affected staff to reach out to it.
Published Report C: Claire Huang (2023). UBS' takeover of Credit Suisse: MAS to
'proactively address' merger's impact on jobs in Singapore. 23 March 2023. The Straits
Times. © 2023 SPH Media Limited.
The Monetary Authority of Singapore (MAS) says it is working with the Institute of
Banking and Finance "to proactively address any impact on employment" as a result of a
merger between Swiss banks UBS and Credit Suisse.
It noted that the details of UBS' takeover of Credit Suisse are still being worked out.
"The implications for jobs in Credit Suisse in Singapore are not clear at this point in time.
"MAS is monitoring this closely and in touch with the two banks," MAS said in its reply to
queries from The Straits Times.
The regulator did not say how many jobs are at stake here, but market sources told ST on
Monday that estimates would put the number of Credit Suisse employees in the Republic
at roughly 3,500.
A report in July 2018 by The Business Times put the number at 4,000.
Both UBS and Credit Suisse did not mention any numbers when asked by ST.
But MAS did reveal the size of Credit Suisse's Singapore operations.
The total assets of the bank's business here, excluding intragroup balances, stood at about
$38 billion as at end-February.
It represents 1.6 per cent of the total assets of Singapore's banking sector.
5
When asked if it would ramp up assessments of banks' resilience, MAS said it assesses the
impact of emerging risks on the sector here on a regular basis, and reviews individual
banks' internal stress tests against interest rate, credit and other risks.
It added that it conducts a comprehensive annual industrywide stress test of key financial
institutions in Singapore.
"The results of the stress test in 2022 showed that Singapore banks would remain resilient
to adverse macro-financial shocks from a sharp tightening of monetary policy amid a
global economic downturn," the regulator noted.
UBS agreed on Sunday to buy rival Credit Suisse for 3 billion Swiss francs (S$4.3 billion) in
a deal engineered by the Swiss authorities to avert further turmoil in domestic and global
financial markets.
The lender, which has its biggest regional office in Singapore, will assume up to US$5.4
billion (S$7.2 billion) in losses under the deal, expected to close by end-2023.
The 167-year-old Credit Suisse is one of 30 global banks deemed systemically important.
But it has been plagued by a string of scandals, including losses linked to the collapse of
investment fund Archegos and Greensill Capital, which triggered a stock sell-off in 2021.
The merger of the two Swiss banks comes after fears about the stability of banks spread
across the Atlantic from the United States.
The 16th-largest bank in the US -- California-based Silicon Valley Bank, which focused on
start-ups -- was closed by the authorities.
Its failure was led by a bank run that came about due to higher interest rates.
Clients were pulling money out to meet liquidity needs as fund-raising became harder.
Two days later, US authorities shut New York-based Signature Bank, which was one of the
main cryptocurrency lenders, in order to contain the situation.
This made it the third-largest bank failure in US history and the second massive bank
failure in a matter of days.
Before the shutdown of the two US banks, Silvergate also ran into trouble after it was hit
with a liquidity crunch following the collapse of US crypto exchange FTX in late 2022.
The bank said it would wind down operations and voluntarily liquidate.
All eyes are on the US Federal Reserve this week as it must decide if it will raise interest
rates again amid the banking turmoil that has been partly triggered by sharp rate hikes.
6
Published Report D: Matthew Thomas, Rebecca Feng, and Weilun Soon (2023). The
Future of UBS Rests with Credit Suisse Customers in Asia. 23 March 2023 19:31. The
Wall Street Journal Online. Copyright 2023 Dow Jones & Company, Inc. All Rights
Reserved.
Executives at UBS Group AG, which until recently competed with rival Credit Suisse Group
AG to win business from Asia's biggest companies and richest people, must now tackle the
thorny question of how to combine the two banks in the region.
That is just one conundrum facing senior executives at the banking giant following its
acquisition of Credit Suisse for $3.25 billion, an emergency deal orchestrated by the Swiss
government.
But it is a critical one for a bank that has long seen Asia as a key growth market,
particularly for wealth management—where banks offer services to the ultrarich.
UBS Chairman Colm Kelleher and Chief Executive Ralph Hamers have called Asia a
cornerstone of the bank's strategy, in part because they say wealth in the region is
growing faster than anywhere else in the world.
UBS generated around $5.6 billion of revenue from Asia Pacific last year, including around
$2.6 billion of revenue from its wealth-management division. It is pushing for more.
The obvious boost to UBS's Asian business will come from the wealth- and assetmanagement clients it will gain from the acquisition, according to people familiar with the
matter.
Mr. Hamers said the smaller Swiss bank's client base in Southeast Asia will complement
UBS's strength in Hong Kong, Singapore, and mainland China.
Share Your Thoughts
How will UBS's takeover of Credit Suisse affect the bank's operations in Asia? Join the
conversation below.
The difficulty will come from bringing together two institutions that have often taken
vastly different approaches to risk, the people said.
After UBS suffered huge losses during the global financial crisis, it took pains to become a
safer, more conservative institution.
Credit Suisse has often been more willing to take big risks, including using its balance
sheet to win business and generate profits, according to current and former employees.
That has helped Credit Suisse win clients in Asia for years, even as the bank was suffering
scandals elsewhere.
7
Its assets under management in Asia Pacific grew to $238 billion in 2021 from around
$164 billion in 2015.
"Credit Suisse had a completely different risk appetite to UBS, which meant they could be
the go-to bank for some of the more aggressive clients," said Dominique Jooris, former
chief executive of Bank Pictet & Cie (Asia), a private bank.
"UBS might not be able to retain those clients, because they were coming to Credit Suisse
for derivatives transactions or aggressive lending and that is probably going to go," said
Mr. Jooris, now the CEO of WMCockpit, a fintech company aimed at the wealthmanagement sector.
Credit Suisse's approach to risk has occasionally backfired, including in the investment
bank.
The bank's lead slot on the U.S.-listing of China's Luckin Coffee Inc. turned from a bragging
right to an embarrassment after Luckin admitted to fraud.
But that risk appetite has also led to wins.
Credit Suisse bankers proved particularly adept at winning business from Southeast Asian
tycoons and Chinese tech founders, offering them both wealth-management and
investment-banking services, according to rivals and former employees.
Credit Suisse didn't break down its assets under management by region in its 2022 annual
report, but its investment-banking-fee revenue in Southeast Asia was around $105 million
last year, compared with the $24 million earned by UBS in the region, according to
Dealogic.
UBS is stronger in more developed markets: It made $217 million of fee revenue in
Australia and New Zealand last year, compared with Credit Suisse's $82 million.
After intense speculation about the financial health of Credit Suisse last year, the bank
attempted to correct course.
It announced a stark shift in strategy last October, telling investors it would reduce its
exposure to risky assets, cut costs and spin off most of its investment bank into a separate
entity.
Credit Suisse said it would "create a simpler, more focused and more stable bank," but the
plan didn't stem the pressure on the Swiss lender.
The planned spinoff of the investment bank has added further uncertainty to how UBS
and Credit Suisse can be integrated.
8
The spinoff, which would be branded with the old Credit Suisse First Boston name, was
due to be run by veteran banker Michael Klein, and Credit Suisse was planning to take a
majority stake in the firm.
UBS's executives are now reconsidering the idea.
Credit Suisse's asset-management business is another positive for UBS executives,
particularly the $115 billion fund-management joint venture it has with the Industrial &
Commercial Bank of China Ltd., the country's largest bank by assets.
The Swiss bank owns a fifth of the joint venture.
ICBC Credit Suisse Asset Management (International) Co. is the largest mutual-fund joint
venture between a Chinese and a foreign institution by assets, according to Wind data.
UBS owns 49% of its own fund joint venture with state-owned SDIC Taikang Trust Co.,
which has $36 billion in assets.
UBS is also applying to set up its own fully owned mutual fund in the country.
That will force UBS to make a choice, since Chinese regulations prohibit financial
institutions—whether foreign or domestic—from holding stakes in more than two
mutual-fund companies.
The rules also limit them to owning a majority of only one mutual-fund operator.
UBS has warned investors that the acquisition of Credit Suisse may require approval from
regulators outside Switzerland, although Mr. Jooris said that is unlikely to be a problem.
"Everybody will be breathing a sigh of relief that the accident-prone child has found a safe
and happy foster home," he said.
"I don't see any regulator putting their foot down."
After the collapse in early 2021 of its long-time client Archegos Capital Management,
which had borrowed billions from Credit Suisse, the bank took a $5.2 billion charge,
according to its latest annual report.
The bank was also caught off guard when Greensill Capital imploded, which led to huge
losses at supply-chain funds that had invested in Greensill's loans through Credit Suisse.
Credit Suisse has warned investors that resolving the problem could lead to a material
loss.
UBS generated around $34.6 billion of revenue in 2022, making its Asian revenue around
a sixth of the total.
9
Credit Suisse brought in net revenue of around $1.8 billion in the region last year,
compared with its worldwide revenue of $16.3 billion.
UBS and Credit Suisse employ around 23,400 people in Asia Pacific, according to UBS's
latest annual report and figures from Credit Suisse's website.
Credit Suisse employees, around a third of that total, were still going to work this week,
attempting to carry on with business as usual despite fears over their jobs.
Some of the bank's staff attended Credit Suisse's Asian Investment Conference, which
went ahead in Hong Kong this week despite the turmoil.
The event had been marketed with the tagline: "Embracing Reality."
Published Report E: Yong Jun (2023). Fewer job options for bankers following Credit
Suisse takeover. 24 March 2023. Business Times Singapore. © 2023 SPH Media Limited.
Analysts expect the number of banking positions to fall in Singapore in the wake of UBS'
takeover of Credit Suisse, due to redundancies after the merger.
Potential mismatches in bankers' portfolios and differences in operating models are
among the possible reasons for the reduction in positions.
A Monetary Authority of Singapore (MAS) spokesperson said the regulator is working with
the Institute of Banking and Finance to "proactively address any impact on employment".
The spokesperson added that MAS is monitoring the situation closely and is in touch with
both banks.
Director of The Meyer Consulting Group Angela Kuek said that as the Swiss central bank
brokered the takeover of Credit Suisse over the weekend, she received about 25 per cent
more calls from private and investment bankers.
Most of the calls she received were from Credit Suisse bankers, 90 per cent of whom are
in private banking.
Kuek noted that UBS aims to generate cost reductions of US$8 billion by 2027, of which
US$6 billion is expected to be generated through staff cost reductions.
"I think that relationship managers, especially after the news, all of them are jittery," she
said, adding that Credit Suisse clients with UBS accounts may prefer to diversify and may
not keep their money with UBS following the merger.
That would mean the Credit Suisse bankers would lose their clients once they become
part of UBS.
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In fact, Kuek said that Credit Suisse's private bankers who hope to move to another bank
may also face some difficulties.
The potential hiring bank would have to compare portfolios to check for overlaps in
clients.
"If there's a duplication of portfolios, you have to take care of your own people," she said,
adding that while there could be opportunities at other smaller Swiss banks such as Julius
Baer and Pictet, the process of hiring such bankers will not be so straightforward.
Pan & Company headhunter Pan Zaixian said he has received more calls from Credit
Suisse bankers across different functions since the fourth quarter of 2022.
"I don't think that we foresaw that (the acquisition) may happen, but we foresaw... that
the bank was under pressure; and there were already people who were looking out," he
said.
Pan added that the situation could be especially challenging for investment bankers, as
capital market activities have slowed as financial conditions tighten.
Displaced investment bankers may also face some hurdles marketing their skill sets to the
local trio of banks, which are likely to be cautious.
"The Singapore banks are not big investment banks; they have a different pay scale,
different concentration of business," he said.
"Even if they want to look out, there are also limited opportunities for them."
The upheaval in the banking industry has made employees nervous.
A poll by The Business Times found that almost one in every five working in the industry
was either looking for a job or expected their job to be impacted by Credit Suisse's
demise.
One in three thought there could be downsizing.
Still, there may be other functions, such as technology, that banks could be hiring for.
Founder of Quantum Leap Career Consultancy Alvin Ang said he is still receiving calls from
larger banks seeking tech talent, as well as for areas such as compliance and consumer
banking.
Because the banks were understaffed and did not hire enough during the Covid-19
pandemic, he has found they are still hiring to fill those gaps.
11
Ang noted, however, that banks are also pursuing job redesigns with consultancies, to see
if the same person could potentially take on more roles and reduce the amount of overall
manpower required.
A common aim he has heard from banks is to "improve systems and processes to improve
productivity and effectiveness".
"They want to reduce costs, so they're looking at whether the spend on technology and
systems can offset the manpower costs," Ang said.
The coming year may remain challenging for the banking sector as well.
Kuek said in her conversations with other human resource professionals at the US banks,
they observed fewer resignations than expected after bonuses were paid out in January.
"The hiring market... will always lag behind what's happening in the financial markets, in
the economy as a whole. There is usually a two- to three-month time lag," she said.
Pan also noted that the latest volatility comes after Citi's earlier exit from certain markets
in the region, which may already have led to a net reduction in headcount within the
sector.
"It's a very careful market out there, a lot of companies and institutions may not feel that
they need to hire aggressively in this market," he said.
Published Report F: Credit Suisse hires former Deutsche Bank wealth head. 24 March
2023. Business Times Singapore. © 2023 SPH Media Limited.
Credit Suisse appointed Kwong Kin Mun, the former South-east Asia wealth management
head at Deutsche Bank, as its new vice-chairman for the region.
Kwong will be based in Singapore and report to Benjamin Cavalli, the company's head of
wealth management for Asia-Pacific, an internal memo said.
He will start his role on Mar 27.
The appointment comes at a time when recruiters across the world are getting an
unprecedented flood of calls from Credit Suisse bankers seeking new jobs, as the
embattled Swiss lender is set to be taken over by UBS Group.
Under a historic deal orchestrated by the Swiss government, UBS agreed to buy its smaller
rival for three billion Swiss francs (S$4.3 billion) in an all-share deal that includes extensive
government guarantees and liquidity provisions.
When announcing the deal, UBS chief executive officer Ralph Hamers said the
combination supports the firm's wealth management growth ambitions in the Americas
and Asia.
12
Kwong, who has four decades of experience in the industry, left Deutsche Bank in 2020,
according to his LinkedIn profile.
He has worked at DBS Group Holdings as well.
At Credit Suisse, he will be working with the South-east Asia markets' leadership team and
senior bankers to bolster the lender's relationship with key clients and stakeholders in the
region, the memo said.
He will also be involved in building the talent pool for the bank's next growth phase.
The combination of the two Swiss banks will "create enormous potential for clients and
private bankers", he said in a statement.
Published Report G: Rupert Walker (2023). Culture clash at the new Swiss superbank. 24
March 2023. Citywire Asia. © 2023 Citywire Financial Publishers Ltd.
The UBS purchase of Credit Suisse has sent shockwaves throughout the banking industry.
The Swiss authorities’ insistence on the deal, the price of the transaction, the treatment
of shareholders and the write-off of Credit Suisse’s capital bonds have all drawn criticism.
The disenchantment is likely shared by many staff at the two banks; they wonder who
they had signed up for.
‘Bankers at the two firms are numb, with many feeling let down by institutions they felt
embedded in,’ said Danny Jones, founding partner, Huddleston Jones, a Singapore-based
executive search firm for the asset & wealth management industry.
‘It leaves me questioning the objectives of UBS with this acquisition, as their wealth
management franchise has shifted its business strategy towards a more risk-averse
approach in recent years, while Credit Suisse has traditionally focused on creating wealth
for its clients, largely through leveraging its investment bank and balance sheet,’ he told
Citywire Asia.
Given the stark differences in client focus and corporate culture between these two
banks, there is a risk of a fundamental mismatch for clients, with assets already flowing to
competing private banks with global markets synergy, Jones argued.
Simeon Fowler, CEO and founder Fowler Fox & Co agrees.
‘The deal has caused shell-shock in the industry,’ he told Citywire Asia.
Culture Clash
13
Fowler, who has been at the top of the executive search space for two decades, believes
that many current staff at both banks will have felt upset and let-down.
‘UBS bankers have been proud to work at a manageably sized bank that focused on
disciplined risk controls and maintaining prudent financial metrics. Now, they find they
are working for a behemoth,’ he told Citywire Asia.
‘The market looks at Credit Suisse bankers as less sophisticated; UBS bankers have always
been classier, so a culture clash is inevitable,’ he said.
However, the message from UBS management to staff at the new superbank has been
very clear since the announcement of the takeover, according to Jones.
‘The objective is not to ‘kill’ Credit Suisse through low-balling or other tactics, but instead
to ensure that the transition goes smoothly,’ he said.
But, there are clear anxieties among staff at UBS, a low-risk-taking bank, that it might be
forced to take on Credit Suisse’s outstanding liabilities and lawsuits.
‘The situation is anything but stable. Bankers will be fighting turf wars, while clients will
wonder what type of service they can expect. Indeed, ultimately clients are likely to suffer
most if the two banks don’t get this merger right,’ said Fowler.
Separating the Wheat from the Chaff
Duplication of roles will necessitate job cuts, but Swiss employment laws protecting
domestic staff would likely see more redundancies in the global offices, Jones noted.
For now, people at both firms are taking stock and assessing what to do next.
‘We see that UBS staff are likely to stay put as they assess the transition before
considering options. Nevertheless, management will need to implement attractive
retention packages to keep the best staff on both sides,’ said Fowler.
Yet, with the power firmly in the hands of UBS, Credit Suisse staff must be considering
their futures.
Besides, Credit Suisse has been a key hunting ground for a while; it was already
haemorrhaging front office talent.
Jones is circumspect.
‘Some [staff] don’t carry the client weight to leave, for others it’s too expensive to leave,
while for the more devoted bankers, they will naturally be weighing up their loyalty versus
risk associated with staying,’ he said.
14
Fowler pointed out that some very senior bankers at Credit Suisse bankers have already
left, while ‘the middle tier will probably be retained, while the average performers need
to be considering every other option.’
Moreover, following Young Jin Yee’s move to head of Deutsche Bank International Private
Bank (IPB) Apac last year from her post as deputy CEO wealth management Apac and
head of wealth management for Singapore at Credit Suisse, one should ‘expect more calls
to Deutsche Bank from Credit Suisse bankers,’ Fowler predicted.
However, recruitment firms are unlikely to reap a hiring bonanza; in fact, the opposite is
the case.
For example, Fowler has heard that many Credit Suisse candidates had been looking at
positions with UBS.
But now, of course, the merger means that recruitment firms will have lost out on paydays for continuing the introductions.
Job Options
One avenue for disgruntled or redundant bankers could be a move to external asset
managers (EAMs).
But Jones is sceptical.
‘Bankers have always viewed EAMs a way of circumnavigating regulation, as much as the
independence the model offers,’ he said.
‘However, we are seeing a declining gravitation towards EAMs due to the inconsistency in
earning potential and client pull back due to lack of accountability in a sector that has
significantly lower regulatory protect versus private banks,’ Jones explained.
On the other hand, major beneficiaries could be smaller, boutique banks such as LGT,
Pictet, UBP and (in Asia) Bank of Singapore, who are keen to build up assets and attract
talent, according to Fowler.
He added that ‘Standard Chartered, who has not one but three ex UBS veterans in senior
roles in Asia, Raymond Ang (global head), Vinay Gandhi (head of Southeast Asia) and
Peter Tung (head of North Asia), will most certainly be selling their new shop as a safe
haven in these troubled times.’
Despite these opportunities, for the moment at least, many bankers are simply trying to
come to terms with the shocking events of the past few days.
Published Report H: UBS Khan unveils retention plans for Credit Suisse Asia staff as bank
seeks to stem exodus. 24 March 2023. The Straits Times. © 2023 SPH Media Limited.
15
UBS Group wealth boss Iqbal Khan told Credit Suisse Group staff in Asia that retention
measures could come as soon as next week, according to people familiar with the matter,
as the bank seeks to prevent an exodus of top talent.
Mr Khan, alongside Credit Suisse's current wealth management chief Francesco De
Ferrari, made the comments at a town-hall event in Hong Kong to Asia-Pacific staff on
Friday.
They were joined by UBS senior Asia executives including Ms Amy Lo, co-head of AsiaPacific wealth, and Asia-Pacific president Edmund Koh, said the sources.
Mr Khan plans to go to Singapore as well, they said.
His presence in Asia and personal intervention signal that UBS is concerned rivals will use
the Credit Suisse drama to poach valuable personnel and clients before the takeover by
UBS is completed this year.
Credit Suisse's more than US$1 trillion (S$1.33 trillion) of client assets were the key appeal
for a deal that bolsters UBS' ambition to be the world's top wealth manager.
The need to retain talent in Asia is especially acute.
At least a dozen private bankers at the managing director-level and above have left Credit
Suisse in Singapore and Hong Kong since September, or are planning to leave, Bloomberg
reported earlier.
Some senior bankers who left handled at least US$1 billion in client assets, and are likely
to take at least a quarter of the funds they manage to their new employers, or as much as
60 per cent in some cases.
It is unclear how many bankers will be offered the packages and whether that will be
granted to other regions.
The executives also told those attending that Asia is full of opportunities and the
combined entity would be a powerhouse, the sources said.
UBS and Credit Suisse representatives declined to comment.
Even before the hastily arranged deal with UBS, Credit Suisse had seen a steady exodus of
top private bankers and a drumbeat of asset outflows reaching US$110 billion in the
fourth quarter.
Few within UBS are better placed than Mr Khan to decide which bankers the firm should
strive to keep.
Before moving to UBS in 2019, he was head of international wealth management at Credit
Suisse, with responsibility for operations in the Middle East and Americas.
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Credit Suisse was so concerned about losing bankers and clients after Mr Khan left that it
set up a spy operation to monitor him.
Mr Khan has already hired a number of former colleagues at his new bank.
Published Report I: Credit Suisse faces possible disciplinary action, says Swiss regulator.
27 March 2023. The Straits Times. © 2023 SPH Media Limited.
Credit Suisse faces the threat of a possible probe and disciplinary action over how top
managers ran the bank in the lead-up to its collapse and takeover by UBS, Switzerland's
banking regulator told NZZ am Sonntag.
"CS had a cultural problem that translated into a lack of accountability," Finma (Swiss
Financial Market Supervisory Authority) president Marlene Amstad told the Sunday
newspaper.
"Often it was not clear who was responsible for what. This favoured a negligent handling
of risks."
Whether to start fresh proceedings remains an "open question," she said, adding, "we're
not a law enforcement agency, but we're exploring options."
A spokesman for Credit Suisse declined to comment.
The government-brokered purchase of Credit Suisse by UBS last weekend has been widely
criticized by both politicians and ordinary citizens in Switzerland.
Finma, in particular, has come under scrutiny for whether it should've done more to
prevent Credit Suisse's collapse.
Ms Amstad refuted the suggestion that Finma didn't intervene early or aggressively
enough to tackle Credit Suisse's problems, pointing to the six enforcement proceedings
against the bank in recent years.
"We intervened earlier, and very intensively, where there were breaches of supervisory
law. But especially when we act harshly, it usually doesn't become public," she told NZZ.
"Imagine if it had become known that we were already working on CS's restructuring
order in November or that we had asked CS to prepare alternative solutions for the case
that had just occurred."
Echoing comments from Switzerland's finance minister Saturday, Ms Amstad said the idea
of nationalising the bank was dismissed considering there are "few good examples" of
that option to point to and it would've meant the government assuming all of Credit
Suisse's balance sheet risks.
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Likewise, Ms Amstad also pushed back against the notion that undue pressure was put on
Switzerland, saying, "the Swiss authorities decided for themselves which solution was
best."
To address concerns about the merged bank being too big to fail, Ms Amstad said in the
future, UBS will face "progressively higher capital and liquidity requirements."
Switzerland has been criticized for failing to give Finma the proper tools with which it can
punish bankers and dissuade bad behaviour.
Ms Amstad said she welcomes discussion about giving the regulator new powers such as
the ability to fine individuals or banks.
"When it comes to the responsibility of individual decision-makers, however, it is evident
that there are gaps that need to be closed," Ms Amstad said.
Finma CEO Urban Angehrn gave a separate interview to Swiss weekly SonntagsZeitung,
echoing points made by both Amstad and Finance Minister Karin Keller-Sutter.
Like Ms Amstad, he stressed that Finma lacks a "Senior Managers' Regime" that would
allow the watchdog to more quickly identify responsibility or place blame, which means
that "afterwards, there are no more excuses."
He defended Finma's record in corralling Credit Suisse.
"We've had quite an effect over the years. We pushed the limits of our mission," he said.
"But, as the federal councillor said: You cannot regulate away a crisis of confidence."
Published Report J: Up to 36,000 jobs may be cut in UBS-Credit Suisse merger: Reports.
2 April 2023. The Straits Times. © 2023 SPH Media Limited.
The merger between Credit Suisse and UBS could see up to 36,000 jobs being cut globally,
Swiss media reports said on Sunday.
Separately, the Financial Times reported that Switzerland's Federal Prosecutor has
opened an investigation into the state-backed takeover.
The prosecutor is looking into potential breaches of Swiss criminal law by government
officials, regulators and executives at the two banks, the report said citing the authority.
There were "numerous aspects of events around Credit Suisse" that warranted
investigation and which needed to be analysed to "identify any crimes that could fall
within the competence of the (prosecutor)", the report added.
The forced marriage of the two banks has caused an outcry in Switzerland, with polls
showing that most Swiss citizens are opposed to it.
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Earlier on Sunday, the SonntagsZeitung weekly and Tages-Anzeiger daily, citing internal
anonymous sources, said management was considering cutting between 20 per cent and
30 per cent of the combined workforce, meaning between 25,000 and 36,000 jobs.
Before the takeover, UBS and Credit Suisse had headcounts of about 72,000 and 50,000
respectively.
Up to 11,000 jobs could be cut in Switzerland alone, according to the papers, which did
not provide details of which posts could be targeted.
Jobs in its US investment banking arm would also be affected.
The takeover by UBS of Credit Suisse was hastily arranged by the Swiss government on
March 19 after its share price collapsed, when investor confidence plunged following two
bank failures in the United States.
Both Swiss lenders are among the select banks around the world considered to be global
systemically important financial institutions, and therefore deemed too big to fail.
UBS announced on Wednesday that it would bring back former chief executive Sergio
Ermotti to handle the huge risks involved in the Swiss banking giant's controversial
absorption of its troubled rival.
The deal has raised concerns over the size of a new bank with US$1.6 trillion (S$2.1
trillion) in assets and more than 120,000 employees worldwide.
"There is a huge amount of risk in integrating these businesses," said UBS chairman Colm
Kelleher last week.
---------------------------------------------------------------------------------------------------------------------Question (30 Marks):
Based on what has happened as documented in the reports above, identify six (6)
different concepts/practices covered by any one or more than one of the 10 lessons of
this module that are relevant to you as a manager managing organizational behaviour
(OB) matters.
Discuss how each of the 6 concepts/practices can be used or applied to explain, justify,
rectify, deal with, capitalise on, pre-empt, reinforce, address, inform, or learn from any of
the OB-related issues, events, decisions, considerations, opportunities, challenges, or
facts that have arisen/appeared as reported above.
Please be specific and justify your answers using up to 1,500 words in total (including
external references, if any).
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External references from outside the above reports are not compulsory but are included
in the word count if they are used.
Headers and footers are not included in the word count.
(Note: Headings and footnotes are different than headers and footers. Headings and
footnotes are included in the word count).
Please use only Microsoft Word, 12-point font size, and the Times New Roman font (or
some other font type that is as easy to read) to write and submit your report.
Discuss the 6 concepts/practices one by one (i.e., in 6 distinct paragraphs/sections).
(30 Marks)
----------------------------------------------- End of Paper -----------------------------------------------
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