How Tidjane Thiam Is Overtaking Sergio Ermotti

Sergio Ermotti, the boss of UBS, first launched the idea of a so-called superbank to share costs. But now it seems his cross-town rival Tidjane Thiam has been faster at coming up with a substantial plan for it.

Tidjane Thiam hasn’t come across as someone who is all empty talk since he took over as head of Credit Suisse last year. Instead, he has made it clear that he is eager to swiftly implement his plans.

The latest evidence comes from a «Financial Times» interview (behind pay-wall). Thiam told the U.K.-based newspaper that he was in talks with another bank about a back-office cooperation to allow both companies achieve further cost cuts.

More to Come

«If we have two servers and a bank has two servers and each one is not fully utilized, why can’t we share that capacity?» he asked in the interview, adding that there was a lot more CS could do on costs: «This is just the beginning.»

CS and the second bank, which remained unidentified in the story, are defining the areas where they can save through cooperation. «We are talking to one specific bank and have asked the teams to come up with one specific idea that we can implement successfully and take it from there.»

Further Cost Cuts a Necessity

The bank’s fiercest rival, UBS, will have taken note, because Sergio Ermotti originally had taken the lead with the idea.

The UBS CEO in July had voiced his thoughts about a superbank, an institute that would pool the back-office functions and the administration of several banks. Ermotti was convinced that the banks were forced to cut costs substantially and sustainably.

Ermotti's Call

To do so, banks didn’t have to give the mergers-and-acquisitions mill a spin, but to enter cooperations to achieve savings of scale. Ermotti may simply have tested the market for his idea but he didn't have to wait long for an echo.

SIX, the stock-exchange operator for instance sees itself as the perfect utility for such a project. Urs Ruegsegger, the SIX boss, told that the company was capable of running such a platform.

More Information in December?

Deloitte expects that banks would be able to save as much as 30 percent by participating in industrialized back office and administration platforms.

It will be interesting to see which company CS has eyed up for the project. Thiam suggested that more could be made public as a December investor day.


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