Wall Street Eases Hiring Freeze in Grab for Credit Suisse Talent

Wall Street banks and European rivals are lifting de facto hiring limits in the aftermath of UBS Group AG's emergency bailout of Credit Suisse Group AG, unable to resist the allure of strong personnel offered at a bargain.

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According to sources familiar with the situation, firms including as Deutsche Bank AG, Citigroup Inc., and JPMorgan Chase & Co. are preparing to employ some of the Swiss firm's investment bankers and wealth managers. Discussions are starting in New York and London, and some headhunters are travelling to Zurich for talks, according to the sources.

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Although the shockwaves from Credit Suisse's effective collapse continue to reverberate throughout markets, the narrative among certain banks has flipped from contagion to once-in-a-decade opportunity. The first emergency sale of a large bank since the financial crisis provides rivals with the opportunity to acquire important employees or businesses that would not have been available otherwise.

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This is reactivating a talent market that had been characterized by job losses and hiring freezes just a few weeks ago. Most of the interest comes from Credit Suisse workers, and while the business has already lost a number of senior bankers in the last two years, rivals see plenty of qualified prospects among the roughly 50,000 employees. UBS may make its own advances to celebrities it wishes to keep.

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"A lot of highly skilled investment bankers are actively being sought," said Michael Nelson, managing director at New York-based recruiting agency Quest Group. "Many of these Credit Suisse executives are aware that UBS has a smaller business and franchise of banking across FIG, leveraged finance, and advisory sectors, and they are contacting out to other firms about prospective seats."

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According to the sources, who asked not to be identified because the plans are secret, Deutsche Bank, Europe's largest fixed income player, is looking closely at recruiting after UBS suggested it will wind down Credit Suisse's debt trading unit.

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UBS Chairman Colm Kelleher made his intentions for Credit Suisse's investment bank apparent during a news conference on Sunday. He stated that the unit will be reduced in size and fit with "our conservative risk philosophy," adding that UBS will "de-risk a lot of the problematic companies that we are getting."

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Bank representatives declined to comment.

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The bailout calls into doubt the spinoff of Credit Suisse's investment banking operation into Michael Klein's First Boston company. Those familiar with the subject indicated earlier this week that UBS is hesitant to move through with such plans and may instead cherry select top dealmakers.

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Because of the uncertainty, several bankers will likely move now rather than wait to see if they made the cut at UBS. Others may be hesitant to join what was formerly the bank's archrival, or they may choose to join a competitor with a stronger investment banking department.

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According to UBS CEO Ralph Hamers, around $6 billion of the $8 billion in expected cost reductions from the merger will come from employment.

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The failure of Credit Suisse adds a new wrinkle to the banks' already turbulent recruiting market. During the coronavirus epidemic, they launched a fight for talent as dealmaking and financing demand increased, only to see activity stagnate when the Fed began hiking interest rates. Goldman Sachs Group Inc. and Morgan Stanley are two corporations that have lately announced job cuts.

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Headhunting firms working with banks such as Goldman Sachs have already begun to fly staff into Zurich to interview with applicants. Lenders such as HSBC Holdings Plc and JPMorgan, as well as other European and Swiss private banks, are looking for wealth bankers or whole teams, according to individuals familiar with the situation.

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According to one source, some businesses are looking beyond bankers who have critical ties with customers to investment professionals who can build sophisticated transactions and investment products for rich clients.

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The government's involvement and Credit Suisse's buyout for a fraction of its market value have rendered much deferred pay nearly worthless. The Swiss government ordered Credit Suisse on Tuesday to freeze delayed bonuses, exacerbating the suffering of bankers who had already seen the value of their awards eroded by the stock's decline.

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UBS may still provide numerous reasons to stay, particularly on the wealth side, where it is aiming to expand. Hamers stated in a statement announcing the Swiss government-backed acquisition that the merger with Credit Suisse will help the firm's wealth management expansion objectives in the Americas and Asia. The merger of the two banks creates a wealth-management behemoth with $5 trillion in invested assets.

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