UBS has whittled down its shortlist to 4 administration consultants to advise on its integration of rival Credit score Suisse, in what is predicted to be one of the vital profitable monetary providers advisory contracts in recent times.
Swiss financial institution UBS is about to determine whether or not to award the contract to Bain & Firm, Boston Consulting Group, McKinsey or Oliver Wyman within the coming days, based on folks concerned within the course of. Smaller contracts may very well be awarded at later dates for extra specialist work, mentioned the identical individuals who warned UBS may determine to reopen the method.
UBS executives invited bids from administration consultants within the days following its settlement to rescue Credit score Suisse in a historic $3.25bn deal that was orchestrated by Swiss authorities.
The duty of bringing collectively for the primary time two international systemically essential monetary establishments is predicted to take a number of years and be fiendishly sophisticated.
The mixed group can have 120,000 employees globally, however tens of 1000’s of job cuts are anticipated.
This week, UBS chair Colm Kelleher changed chief government Ralph Hamers together with his predecessor Sergio Ermotti in recognition of the size of the problem of creating the transaction a hit.
“That is the most important single monetary transaction since 2008,” Kelleher instructed reporters. “That brings with it vital execution threat.”
Ermotti, who formally begins on Wednesday, is predicted to have a say on which advisor is chosen, although the mixing course of is being led by chief data and digital officer Mike Dargan.
Claiming the contract can be a boon for the profitable bidder, at a time when banks are typically reducing again on their spending on exterior consultants.
Final 12 months, UBS focused decreasing its spending on exterior advisers as a part of a pre-takeover drive to chop $1bn of prices by the top of this 12 months.
Lately, UBS has employed McKinsey to assist Hamers develop his technique for the financial institution, which was unveiled final 12 months, and to implement an agile working technique, which is aimed toward rushing up decision-making. Some senior bankers have expressed concern about UBS creating an over-reliance on the agency.
Equally, the financial institution used consultants from Oliver Wyman to advise on its threat administration operations and BCG for some smaller tasks, based on folks aware of inner workings.
Credit score Suisse had additionally been trying to scale back its use of exterior advisers, which included a plan to halve spending on consultants final 12 months. It lowered its exterior advisor headcount by a fifth within the ultimate quarter of 2022. It relied on recommendation from McKinsey for its two current restructuring plans — one below former chair António Horta-Osório and the opposite from final 12 months that aimed toward radically reforming the enterprise.
As a part of the accompanying cost-cutting plans, Credit score Suisse sought recommendation from Oliver Wyman and BCG, whereas Deloitte offered enter on the financial institution’s pay coverage, based on folks with information of their involvement.
UBS, Bain, BCG, McKinsey and Oliver Wyman declined to remark.
Extra reporting by Michael O’Dwyer
