Credit Suisse Bonuses Ruling Challenged by Swiss Government to Top Court

(Bloomberg) — The Swiss finance ministry appealed a ruling that a dozen ex-Credit Suisse bankers were unlawfully stripped of their bonuses when UBS Group AG bought its collapsing rival, setting up a potential showdown in the country’s highest tribunal between the government and a cadre of top bankers.

The Swiss court  “failed to take key aspects into account, in particular by not considering the exceptional circumstances leading up to the takeover of Credit Suisse, which the legislator would not have been able to foresee,” the finance ministry said in a statement on Friday. It has lodged an appeal at the Swiss supreme court, it said.

The finance ministry issued an order following the bank’s rescue by UBS in March 2023, telling Credit Suisse to cut bonuses altogether for its executive board members, reduce them by 50% for managers one level lower, and by 25% for employees two levels down. The provision of state guaranteed aid had been the justification for the bonus ban. 

But on May 14, the Federal Administrative Court ruled in a test ruling for a group of 12 bankers that the government’s decision was wrong. The ruling could potentially affect about 1,000 people it said. 

Neither the Finance Ministry nor UBS “could demonstrate that even a single one of the twelve managers concerned had caused excessive risks and jeopardized the financial situation of Credit Suisse through their wrongful actions or omissions,” the court said in a statement.

“UBS takes note of the Federal Department of Finance’s decision to appeal the case,” a spokesperson for the bank said.

–With assistance from Levin Stamm and Noele Illien.

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