Private bankers at Credit Suisse Switzerland are still switching over to competitors, despite retention payments averaging 100,000 Swiss francs that are said to be distributed among experienced front-line staff.
UBS created more clarity for Credit Suisse employees in Switzerland when it decided to fully integrate last August. But this was not enough to prevent experienced front-line staff from turning their backs on the megabank project.
A team of three private bankers in Bern recently did just this, switching over to investment house Vontobel, as reported by finews.asia. A few days earlier it was announced three former Credit Suisse client advisors in Lucerne will also be joining the private bankers at Reichmuth & Co. Rumors of departures from the wealth management wing of the acquired bank also continue to swirl.
Substantial Sum
Clearly, the attraction of retention payments, which UBS has been dolling out in recent months, is also waning among those willing to switch. On average, the bank paid 50,000 Swiss francs ($57,655) upfront in cash to experienced Credit Suisse client advisors in Switzerland, research reveals. They were allegedly also promised the same amount in locked UBS shares.
With dozens of such instances nationwide, UBS would have transferred a substantial sum, so some of the advance payments at least would seem to be sunk funds.
Back Office Included
UBS declined to comment on retention bonuses when asked. But UBS CFO Todd Tucker confirmed the general reasoning behind such payments during the third quarter results. «In terms of the actual retention payments themselves, those are done selectively throughout 2023 to retain key client-facing personnel but also key middle and back-office personnel». The manager added this was in particular to ensure operational stability.
The statement contrasts to a certain extent with ones made within the leadership environment of UBS Switzerland that the motivation of Credit Suisse employees is fundamentally derived from collaborating with the market leader’s teams and new leadership. However, it is clear from the personnel reports from competitors in the Swiss market that centrifugal forces are at work.
Leaving Double the Money Behind
More senior Credit Suisse executives who do not want to make the transfer to the new UBS may end up leaving double the amount of money behind: the effective value of the locked UBS shares from the retention bonus and the deferred salary components that they would miss out on as «bad leavers» from Credit Suisse.
Credit Suisse also brought in a new bonus system in 2022, which was intended to secure the loyalty of executives through immediate big cash payments and locked salary components, as reported by finews.ch. This set-up also included a restrictive clause of sorts: anyone resigning from Credit Suisse within three years of receiving this compensation must repay the cash component based on the amount of working time in the interim. That could be quite costly for some.
Increased Pressure to Perform
Among Credit Suisse employees, the new approach, which has been introduced in the private banking arm under UBS’ control, is also causing a stir.
According to reports, the UBS leadership is not just distributing money: it also wants to see results. So there has been some talk of increased pressure to perform and regular «sales calls» with management, during which the front-line staff have to report on their progress in achieving their goals – not an environment in which all Credit Suisse veterans will find themselves equally at home in.
