GENEVA – The merger between Credit Suisse and UBS could see up to 36,000 jobs being cut globally, Swiss media reports said on Sunday.

Separately, the Financial Times reported that Switzerland’s federal prosecutor has opened an investigation into the state-backed takeover.

The prosecutor is looking into potential breaches of Swiss criminal law by government officials, regulators and executives at the two banks, the report said citing the authority.

There were “numerous aspects of events around Credit Suisse” that warranted investigation and which needed to be analysed to “identify any crimes that could fall within the competence of the (prosecutor)“, the report added.

The forced marriage of the two banks has caused an outcry in Switzerland, with polls showing that most Swiss citizens are opposed to it.

Earlier on Sunday, the SonntagsZeitung weekly and Tages-Anzeiger daily, citing internal anonymous sources, said management was considering cutting between 20 per cent and 30 per cent of the combined workforce, meaning between 25,000 and 36,000 jobs.

Before the takeover, UBS and Credit Suisse had headcounts of about 72,000 and 50,000 respectively.

Up to 11,000 jobs could be cut in Switzerland alone, according to the papers, which did not provide details of which posts could be targeted.

Jobs in its US investment banking arm would also be affected.

The takeover by UBS of Credit Suisse was hastily arranged by the Swiss government on March 19 after its share price collapsed, when investor confidence plunged following two bank failures in the United States.

Both Swiss lenders are among the select banks around the world considered to be global systemically important financial institutions, and therefore deemed too big to fail.

UBS announced on Wednesday that it would bring back former chief executive Sergio Ermotti to handle the huge risks involved in the Swiss banking giant’s controversial absorption of its troubled rival.

The deal has raised concerns over the size of a new bank with US$1.6 trillion (S$2.1 trillion) in assets and more than 120,000 employees worldwide.

“There is a huge amount of risk in integrating these businesses,” said UBS chairman Colm Kelleher last week. REUTERS, AFP