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24 April 2024

UBS to pay CHF2bn bonuses for 2008

By Reuters

Switzerland's UBS, the world's largest wealth management bank in terms of assets, will pay out CHF2 billion (Dh6.36bn) in bonuses for 2008, even though it received a state bailout, Swiss Sunday paper Sonntagszeitung reported.

The bank agreed the bonus, which equates to about CHF26,000 for each of the bank's 77,000 employees, with Swiss financial regulator Finma after originally seeking a higher payout of more than CHF3bn, the paper said.

The bank was also negotiating with Finma for a new bonus scheme for managers, to be introduced in the second quarter, that would mean managers only received bonuses if the bank operated profitably.

UBS, which has written down $49bn (Dh180bn) in the financial crisis, transferred about $60bn in toxic assets to a central bank-run fund, thus removing uncertainty about more write-downs, although an CHF8bn fourth-quarter loss is still expected. The government also agreed to inject 6 billion Swiss francs of fresh capital into UBS in exchange for a 9.3 per cent stake.

UBS, an icon of Swiss banking, is struggling to rebuild its once-powerful brand after massive investments into risky US assets forced it to make the write-offs. The bank's management has received harsh criticism and been the subject of protests, leading it to agree to an advisory vote by shareholders on management pay and prompting some former managers to give back part of their bonuses.