Bloomberg - Evening Briefing - The gutting of Credit Suisse

Three months after UBS agreed to buy Credit Suisse in a government-brokered rescue—the coup de grâce for its teetering Swiss rival and the European chapter of this spring’s banking fiascoes—the full human price of the forced union has now become clear. UBS is said to be planning to terminate more than half of Credit Suisse’s 45,000 employees. It’s a dramatic drop of the anvil on a financial sector in which Wall Street banks such as Morgan Stanley and Goldman Sachs previously announced thousands of their own firings.

Sergio Ermotti Photographer: Jason Alden/Bloomberg

UBS, whose combined workforce jumped to about 120,000 when the deal closed, has said it aims to save some $6 billion in staff costs in the coming years. Credit Suisse employees in London, New York and parts of Asia are expected to suffer the worst of the dismissals. Staffers have been told to expect three rounds of terminations this year, with the first expected by the end of July and two more tentatively planned for September and October. UBS signaled early in the takeover that it intended to drastically cut back at Credit Suisse’s loss-making investment bank, which was the source of the $5.5 billion disaster tied to the Archegos Capital Management scandal in 2021. Shares of UBS gained as much as 2% in US trading on Tuesday. As for UBS Chief Executive Officer Sergio Ermotti, he says the integration with Credit Suisse is going “very well.”   —David E. Rovella

Many of the hundreds of thousands of people fired by finance and tech companies over the past year could be forgiven for thinking a coming recession was the big reason for their fate. That looming, inevitable US downturn which Wall Street experts and talking heads have loudly predicted for more than a year now. The one that hasn’t happened yet. Now, it would seem, some members of the Cassandra party are finally coming around to the possibility that it never will. A flurry of new data showed continued strength in several corners of the US economy, reaffirming an unavoidable picture of resilience. Purchases of new homes climbed to their fastest annual rate in more than a year, durable goods orders topped estimates and consumer confidence reached the highest level since the start of 2022, according to the Tuesday reports. Another release showed housing prices in the US rose for a third-straight month. “The consensus view continues to stubbornly call for a recession starting in a few months,” Stephen Stanley, chief US economist at Santander US Capital Markets, said in a note. “But the economic data are telling far different story.” That story was laid out in the latest reports on retail sales, inflation-adjusted consumer spending and the job market.

The man who runs the bank widely seen as the European champion-in-waiting has all he needs for a major merger. Jean-Laurent Bonnafe has built an $8.3 billion war chest and the biggest corporate and investment bank in Europe during his 12-year stretch atop BNP Paribas. The chief executive has seized on rivals’ stumbles and cost-cut his way to record earnings. And he arguably knows how to pull off the cross-border marriages needed to compete with encroaching American giants.

Jean-Laurent Bonnafe Photographer: Christophe Morin/Bloomberg

When the US first embraced “de-risking” to get Europe on board with measures to deny key tech to China, officials in Beijing dismissed the term as no different than decoupling. Now they are trying a new strategy: Redefine the concept. Chinese Premier Li Qiang last week acknowledged the legitimacy of de-risking while speaking to CEOs on a trip to Germany, but with a twist.

US antitrust agencies are requiring firms to turn over much more information about their transactions than before in an overhaul to merger rules. The revamp, a move by the Justice Department and the Federal Trade Commission to crack down on illegal tie-ups, could add as many as two to three months to the timetable for deals.

Following its list of 50 Companies to Watch in January and a second-quarter update in April, Bloomberg Intelligence is back with 10 companies to watch for the third quarter. The new companies in the spotlight—including Adidas, Alphabet and Cheesecake Factory—span sectors and regions. Each scenario outlines important catalysts coming in the next few months.

South Africa and Germany signed an agreement to create a task force that will help the African nation meet international demand for green hydrogen. South Africa’s abundant wind and solar resources, which would be used to provide the energy to split water, have positioned it to potentially become a major producer of the green fuel, which is expected to ultimately replace natural gas.

Much of America is broiling right now in its latest crushing heatwave. But the climate crisis has also brought with it extreme weather events at the other end of the thermometer. And while weak grids in states like Texas are at risk in the summer months, so too is much of America in the winter—thanks to the fracking boom. The grid’s newfound reliance on natural gas has been traditionally hailed as a breakthrough. Now, it’s one of America’s biggest vulnerabilities.

• Wagner chief lands in Belarus as Putin claims “civil war” averted.
• What Wagner’s mutiny means for its sprawling business empire.
• Supreme Court rejects GOP case seen by scholars as threat to democracy.
• New York skies set to darken again with smoke from Canada wildfires.
• French Riviera mansion of dead Russian tycoon could fetch $100 million.
• Wall Street’s intern cash is surging—Citadel now pays $120 an hour.
• Everyone in South Korea is about to get younger. 

A portrait by Gustav Klimt sold for £85.3 million ($108.4 million) at Sotheby’s in London on Tuesday, becoming the most valuable artwork to sell at auction in Europe. The previous record was set in 2010, when Giacometti’s L'homme qui marche sold for £65 million in London. Carrying an unofficial estimate in the region of £65 million, the Klimt, Dame mit Fächer (Lady with a Fan), was executed in 1917-1918 and carried an irrevocable bid.

Gustav Klimt’s Dame mit Fächer (Lady with a Fan) from 1917-1918. Source: Sotheby’s 

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