Colm Kelleher, the chairman of UBS, looks to shake hands with Axel Lehmann, his counterpart at Credit Suisse, on Sunday.
Denis Balibouse/Reuters
Switzerland is halting some Credit Suisse banker bonuses.
It’s a U-turn from before when CS had told staff they would still receive bonuses — even for 2023.
The UBS takeover deal, which was supported by state funds, sparked backlash about the planned bonuses.
Credit Suisse bankers may not receive some of those promised bonuses — the Swiss government halted some of these payouts after receiving public backlash against the historic state-engineered rescue of the troubled lender.
The Swiss federal finance ministry said in a statement on Tuesday that it’s “temporarily suspending certain forms of variable remuneration for Credit Suisse employees.
The ministry said it’s suspending certain payments. But it is making exceptions for some payments that were granted in the years up to 2022 and are in the process of being paid out.
This is for “legal certainty” and to “avoid impacting employees who did not themselves cause the crisis,” the ministry added.
The about-turn follows Credit Suisse reassuring staff in a memo after the Sunday deal with UBS that they would still receive bonuses — even for their work in 2023.
But the Swiss public is pissed off about the payments, with Swiss unions demanding the bank’s management bonuses be halted, Reuters reported on Tuesday.
The Swiss government has been careful about its messaging about the rescue of Credit Suisse, which involves an around $3.25 billion acquisition by UBS, a larger lender. Swiss finance minister Karin Keller-Sutter said Sunday the deal was “no bailout,” stressing that the takeover is a “commercial solution.”
But the deal comes with government guarantees and liquidity provisions. All in, the Swiss government and the country’s central bank are making available a backstop of up to 109 billion francs, or $117.7 billion, for the deal — that equals about 12,500 francs for each person in Switzerland, per Bloomberg’s calculations on Tuesday.
However, top economist Mohamed El-Erian disagrees with the Swiss government’s messaging. He told Bloomberg TV Sunday that the deal is a bailout. “The phrase ‘bailout’ has become such an awful phrase that everybody is avoiding it. They’re going out of their way to say that it’s not a bailout, but then they can’t explain why money’s being put to work,” he told the network.
Credit Suisse did not immediately respond to Insider’s request for comment sent outside regular business hours.