UBS has narrowed its shortlist to four management consultants to advise its integration of rival Credit Suisse, in what is expected to be one of the most lucrative financial services consultancy deals in recent years.
Swiss bank UBS is expected to decide whether to award 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 later dates for more specialist work, said the same people who warned UBS could decide to reopen the process.
UBS executives solicited bids from management consultants within days of its agreement to rescue Credit Suisse in a landmark $3.25 billion deal orchestrated by Swiss authorities.
The task of bringing two global systemically important financial institutions together for the first time is expected to take several years and be fiendishly complicated.
The combined group will have 120,000 employees worldwide, but tens of thousands of job cuts are expected.
This week, UBS chairman Colm Kelleher replaced chief executive Ralph Hamers with his predecessor Sergio Ermotti in recognition of the scale of the challenge to make the deal a success.
“This is the largest financial transaction since 2008,” Kelleher told reporters. “This carries a significant execution risk.”
Ermotti, who officially starts on Wednesday, is expected to have a say in who the consultant is, though the onboarding process will be led by chief information and digital officer Mike Dargan.
Claiming the contract will be a boon to the successful bidder, at a time when banks are typically cutting back on spending on outside consultants.
Last year, UBS aimed to cut spending on outside advisers as part of a pre-takeover drive to cut costs by $1 billion by the end of this year.
In recent years, UBS has tapped McKinsey to help Hamers develop its strategy for the bank, which was unveiled last year, and implement an agile working strategy, which aims to accelerate decision-making. Some senior bankers have expressed concern that UBS is developing an overreliance on the business.
Similarly, the bank has brought in consultants from Oliver Wyman to advise on its risk management operations and BCG for some smaller projects, according to people familiar with the inner workings.
Credit Suisse had also tried to reduce its reliance on outside advisers, which included a plan to cut consultancy spending in half last year. It cut its staff of external consultants 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 António Horta-Osório and the another last year that aimed to radically reform the company. .
As part of the accompanying cost-cutting plans, Credit Suisse has sought advice from Oliver Wyman and BCG, while Deloitte has provided information on the bank’s compensation policy, according to people familiar with their involvement.
UBS, Bain, BCG, McKinsey and Oliver Wyman declined to comment.
Additional reporting by Michael O’Dwyer