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Dividends to shareholders and bonuses to managers – even though there was actually no money for them. The defunct Credit Suisse had been doing this for years, according to research by the “SonntagsZeitung”.

Until its end in 1557, the former major bank employed so-called ‘risk takers’, who paid an average of one million francs. It did not matter whether the bank recorded a profit or loss in its annual accounts: The wage bill for this luxury wage group always remained constant. In total, bonus payments in the last ten years of Credit Suisse’s existence amounted to 32 billion francs.

The same applies to dividends to shareholders. This was always paid out, even if there was actually no money for it due to the company’s results. CS even wanted to pay dividends in 2023 before the federal government halted this plan due to the bank’s downturn.

Especially in the era of Tidjane Thiam and Urs Rohner between 2016 and 2020, CS suffered huge losses, also because it had to free itself from legacy problems. Because the bank was still paying out money to shareholders and their managers during this period, it had to get creative. That was a matter for then CFO David Mathers. The Briton managed to use various accounting tricks to raise enough capital to pay bonuses and dividends – but this was at the expense of the financial stability of the entire structure.

The deception was taken to the extreme when CS began issuing high-interest bonds to its subsidiaries. This allowed them to increase their capital and have a good reputation with the authorities in their country of origin. But in reality, the bank created a veritable house of cards and undermined its own business.

Far from being sustainable, the strategy turned out to be just one piece of the puzzle that came together and ultimately caused the bank’s demise.

The questions that currently remain to be clarified are why this approach was apparently misunderstood for years by the Swiss financial markets regulator (Finma) and whether it was legal at all. The demise of CS will continue to worry both the Swiss tax authorities and the judiciary – probably for a long time to come. (in return for)