The Credit Suisse logo on a building in Lugano on June 9, 2023 (AFP/Fabrice COFFRINI)
Credit Suisse paid 32 billion Swiss francs (33.2 billion euros) in bonuses during the last decade before its catastrophic takeover by its rival UBS, while the bank was in the red, says the weekly SonntagsZeitung on Sunday .
Two days before the first anniversary on Tuesday of the last-minute rescue of Switzerland’s second-largest bank, the weekly relies on the report from UBS’s lawyers as part of the lawsuits launched by angry investors.
Thus, the bank, now absorbed by UBS, paid approximately 1 million francs each year to each of its 1,557 risk managers over this period, regardless of the state of the bank’s finances, says the weekly.
“Another constant was the payment of dividends by Credit Suisse. They too were paid by touching the financial heart of the bank since there was no profit in total,” he emphasizes.
It was only in the spring of 2023 that the federal authorities prohibited the bank from paying a dividend, as the managers had intended when the establishment was already at the heart of a storm which would ultimately destroy it. take away.
To finance all of this, Credit Suisse managers carried out financial arrangements to find the money to finance the largesse to shareholders.
Credit Suisse first drew money from the subsidiaries, in particular the Swiss branch, which remained the crown jewel until the end.
Over the period 2016 – 2020, 3.4 billion francs were pumped from the bank’s Swiss subsidiary to the holding company which paid dividends in the form of short-term loans known as Short term intercompany debt. .
And it was then that the managers had the idea of using AT1 bonds, which became famous because the financial market supervisory authority Finma declared these risky Credit Suisse securities worthless on the day of the buyback. , for an amount of nearly 16 billion francs.
These bonds carried very high interest rates, notes the weekly and the arrangement was therefore not viable in view of the performance of the banking group.
In the spring of 2021, Credit Suisse was the victim of two financial disasters in quick succession (Greensill and Archegos) which cost it billions.
It was the beginning of the crisis of confidence that ultimately sank the company.
“The question is whether all this was really legal,” asks the SonntagsZeitung.
“The Ministry of Finance has been saying for a year that this is being clarified. This has still not happened,” underlines the weekly.
© 2024 AFP
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