Santander has approached several key bankers within Credit Suisse's investment banking division, a move that, if successful, may help the Spanish bank expand its investment banking presence in the US.
Santander is targeting a global hiring operation focused on the US, according to three sources, as Credit Suisse's bankers wait to learn whether they will still have jobs after the forced takeover by UBS. Santander is looking to hire bankers from Credit Suisse teams including equity capital markets, leverage finance, financial sponsors, investment bank sector coverage and the US distribution platform, the sources said.
“The bank is making several hires,” one of the sources said. “But, characterising it as a lift-out or a group thing would be incorrect.”
Another source said all the talks are with individuals. If they prove fruitful, that could lead to more bankers joining. There is a lot of uncertainty about how many Credit Suisse bankers UBS will keep, and other banks are also talking to Credit Suisse bankers so the situation is fluid.
The Financial Times reported on Monday that Santander was talking to senior investment bankers at CS in New York and named David Hermer, head of global capital markets, and Malcolm Price, global head of the financial sponsors group, among those joining the Spanish bank.
Santander CFO Jose Garcia Cantera was asked by Bloomberg TV on Tuesday about whether the bank was seeking to build up its investment bank by hiring from Credit Suisse. He declined to comment on specific hirings but said the corporate and investment bank has gained market share in recent years and was more profitable than many similar businesses at rival banks.
“We are always looking at ways to grow and develop our business and when we deploy capital inorganically, we do that without moving an inch from our strategy,” Garcia Cantera said. "That’s the way we’ve done it in the last couple of years and those decisions have been very profitable."
The second source said Santander is looking selectively at professionals in other geographies but is unlikely to make as many hires as it is targeting in the US.
MOVING SLOWLY
With UBS’s plans for Credit Suisse's investment banking division yet to emerge, some CS employees have started to move on after being approached by rivals or other banks looking to increase their market share in the US.
“UBS has moved slowly,” the first source said, noting the bank has yet to lock in Credit Suisse talent that could be lured to rivals. “There has been a splintering already.”
Picking up Credit Suisse employees could allow an investment bank seeking to expand its operations or increase market share to hit the ground running in the US, a process that otherwise could take years to achieve, the two sources said.
Citigroup recently hired three CS bankers in Europe in consumer and retail banking and industrials who spent a combined 53 years at the Swiss bank. MUFG has hired in New York, and other firms reaching out to CS bankers include Goldman Sachs, Wells Fargo and Mizuho, the first source said.
Standard Chartered in January hired three people from Credit Suisse for its ESG team, and the bank's finance chief Andy Halford said on Wednesday there were opportunities to hire staff and win business as a result of problems elsewhere in the industry. “Out of turmoil comes opportunity as well as downside. There are hiring opportunities," said Halford.
UBS plans to focus on its private wealth business, and layoffs are not expected to happen until after the merger closes in the next two months.
In March, UBS purchased its Swiss rival for SFr3bn (US$3.3bn) in a deal engineered by the government, the central bank and market regulator Finma to avoid a meltdown in the country's financial system. UBS has said integrating the investment bank will be a challenge, and it is expected to offload billions of dollars of riskier assets and cut hundreds of staff as part of the process.
No contracts have been offered to Credit Suisse bankers and the two banks are still operating separately. UBS CEO Sergio Ermotti said on Tuesday he plans to move swiftly in deciding which parts of Credit Suisse's investment bank it will keep as soon as the takeover is concluded.
(Additional reporting by Steve Slater)
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