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The decision was preceded by a fierce struggle between UBS management and personnel committees. It’s now clear: The big bank will raise wages by 2.25 percent for employees of UBS and acquired Credit Suisse. A spokesperson confirmed Blick’s relevant research. The salary increase affects “UBS and Credit Suisse employees working up to mid-level management in Switzerland,” the spokesperson wrote in a written statement. The 2.25 percent regulation will come into force on March 1. Therefore, the increase is slightly above the forecast made by in-house economists for the financial sector.
The wage increase particularly affects all employees covered by the sector’s collective bargaining agreement. But not everyone gets more money automatically into their account. Pay adjustments are “market, function and performance driven,” the bank wrote. This means that the salary increase rate does not necessarily have to be 2.25 percent, but can vary up or down.
Increasing wages only on an individual basis has been met with criticism. “We regret that UBS has not made a general wage increase,” says Natalia Ferrara (41), managing director of the Swiss Association of Bank Personnel (SBPV). Your organization advocated for a five percent wage adjustment she. The association argued that employees, especially those who have been left empty-handed for several years, should now receive a wage increase due to inflation and bubbling bank profits. The SBPV also joined the demand of the Swiss Trade Union Confederation, demanding five percent.
Only one in three people earn more
Considering the upcoming mass layoffs, the association can consider the wage increase implemented as a success. Last summer, UBS boss Sergio Ermotti (63) announced that 3,000 jobs would need to be cut by the end of 2025 due to full integration. But overall, there will be much more job loss as early retirements and voluntary departures are not included in this number.
UBS and Credit Suisse currently employ approximately 37,000 people in Switzerland. However, only one in three employees will benefit from the wage increases. This means the fixed pay of around 24,000 employees will remain unchanged. Fixed salaries are also important for bank employees with high wages. But for them, the annual bonus is the deciding factor whether the year is a good or mediocre one.
Bonus season starts at the end of January. The management and administrative boards then determine the amount of the bonus pot. The mood at UBS and Credit Suisse is particularly tense this year because bonuses are coming from a single pot for the first time. How high the bonus will be has not been disclosed in detail yet. Last year UBS distributed a total of 3.3 billion francs. At Credit Suisse, the figure was 1.6 billion. It is not impossible for the 2023 jackpot pot to exceed the 5 billion franc limit.
The combined major bank had 115,981 full-time positions as of the end of September 2023. That’s about 3,100 fewer than three months ago. This number is likely to drop further in the fourth quarter. If UBS distributes 5 billion, this would result in an average variable pay of at least 44,000 francs per full-time position. Last year it was 45,000 francs at UBS and 31,000 francs at CS.
Adjust wage differences
Even though Credit Suisse went bankrupt last year, its employees will also be given bonuses. This is confirmed by many sources. Insiders say UBS cannot afford to pay bonuses to its own employees but cannot afford to pay their colleagues at the bank it is taking over. They want to position themselves as banks so they can forget about the divisive cultural filter statements that senior management made last spring.
However, there are also many CS teams that will receive much less bonuses or no bonuses this year. This situation especially affects employees in high-paying positions. It was an open secret in the Swiss banking industry that CS always paid its employees more than UBS. Top earners at CS’s Swiss unit sometimes received base salaries as much as 20 percent higher than their counterparts of the same rank at UBS. There was also higher variable compensation. This must end now. The so-called fee bands of the two major banks will be harmonized. This is done through bonuses and, in some cases, reductions in the fixed wages of top earners.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
