UBS has reduced its shortlist to four management consultants to advise on its integration of rival Credit Suisse in what is expected to be one of the most lucrative financial services advisory contracts in recent years.
Swiss bank UBS is set to decide on awarding the contract to Bain & Company, Boston Consulting Group, McKinsey or Oliver Wyman in the coming days, according to people involved in the process. Smaller contracts could be awarded at a later date for more specialist work, the same ones could decide to reopen the process, warned UBS.
UBS executives invited bids from management consultants days after an agreement to rescue Credit Suisse in a landmark $3.25 billion deal was organized by Swiss authorities.
The task of bringing together two global systemically important financial institutions for the first time is expected to take many years and be fiendishly complex.
The combined group will have 120,000 employees globally, but tens of thousands of job cuts are expected.
This week, in recognition of the scale of the challenge of making the transaction a success, UBS Chairman Colm Kelleher replaced Chief Executive Ralf Hammer with his predecessor Sergio Ermotti.
“This is the largest single financial transaction since 2008,” Kelleher told reporters. “This brings with it significant execution risk.”
Ermotti, which officially starts on Wednesday, is expected to choose which advisor, although the integration process is being led by chief information and digital officer Mike Dargan.
At a time when banks are generally cutting their spending on external consultants, claiming the contract would be a boon for the winning bidder.
Last year, UBS set a target of reducing its spending on external consultants as part of a pre-takeover drive to cut costs by $1bn by the end of the year.
In recent years, UBS has hired McKinsey to help Hammers develop its strategy for the bank, which was unveiled last year, and to implement an agile working strategy, which aims to improve decision-making. have to accelerate. Some senior bankers have expressed concern about UBS developing an excessive dependence on the firm.
Similarly, the bank used consultants from Oliver Wyman to advise on BCG for its risk management operations and some smaller projects, according to people familiar with the inner workings.
Credit Suisse was also attempting to reduce its use of outside consultants, including plans to cut spending on consultants in half last year. It slashed its external advisory workforce by a fifth in the last quarter of 2022. It relied on advice from McKinsey for its two recent restructuring plans — one under former chairman Antonio Horta-Osorio and another from last year that aimed to radically reform the business. ,
As part of the accompanying cost-cutting plan, Credit Suisse sought advice from Oliver Wyman and BCG, while Deloitte provided input on the bank’s pay policy, according to people with knowledge of their involvement.
UBS, Bain, BCG, McKinsey and Oliver Wyman declined to comment.
Additional reporting by Michael O’Dwyer
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