‘Almost one billion francs’: Credit Suisse reveals exposure to Russia

Swiss banking giant Credit Suisse said Thursday that its exposure to Russia totalled over $900 million at the end of last year, with "minimal" links to individuals sanctioned over the Ukraine war.

A sign of Swiss banking Credit Suisse is seen on a branch in Lausanne on April 6, 2021. (Photo by FABRICE COFFRINI / AFP)
A sign of Swiss banking Credit Suisse is seen on a branch in Lausanne on April 6, 2021. (Photo by FABRICE COFFRINI / AFP)

Russia has been hit with crippling sanctions and traditionally neutral Switzerland last week aligned itself with EU penalities over the February 24 invasion of Ukraine and ordered the freezing of Russian assets.

Switzerland’s second largest bank said its exposure to Russia stood at 848 million Swiss francs ($914 million, 828 million euros) at the end of 2021.

But as of March 7 it had “minimal total credit exposure towards specifically sanctioned individuals managed by our wealth management division,” a statement said. Credit Suisse’s top domestic rival UBS announced earlier this week that its exposure to Russia totalled $200 million, with under $10 million of loans outstanding to sanctioned clients.

EXPLAINED: Which banks are best for foreigners in Switzerland?

Credit Suisse said it had registered derivatives and financing exposures in its investment bank, trade finance exposures in its Swiss Universal Bank and Lombard, as well as loans issued by its international wealth management division. In addition, its Russia affiliates totalled 195 million Swiss francs as of December 31, 2021.

Credit risk exposure to war-ravaged Ukraine and to Belarus, which is also facing sanctions for assisting Russia in the invasion, “were not material”, it added.

‘Well-managed’ exposure 

“In purely financial terms, we have reviewed our positions and believe that the bank’s exposure in relation to Russia is well-managed, with appropriate systems in place to address associated risks,” the bank’s chief executive Thomas Gottstein said in the statement.

He acknowledged that “the current environment means making difficult decisions and managing through challenging situations,” but stressed that Credit Suisse was doing so “with a clear sense of perspective and the desire to do the right thing.”

“As a matter of principle and policy, Credit Suisse applies all sanctions, in particular those issued by the EU, the United States and by Switzerland.”

In terms of physical presence in Russia, Credit Suisse has an office in Moscow with around 125 staff.

“Their ongoing safety and security is a top priority; we monitor the situation daily and have planned for a number of potential scenarios,” the bank said.

Reader question: Can I open a Swiss bank account from abroad?

Executive bonuses slashed

Credit Suisse also announced it would slash executive bonuses following a tumultuous 2021, coloured by major losses after the meltdowns at British financial firm Greensill and US fund Archegos. Gottstein saw his overall package cut by 43 percent to 3.9 million Swiss francs, including his 2.7-million base salary.

The chief executive’s variable bonus was slashed to 800,000 francs from the 3.6 million he received for the 10 months he served in 2020 after taking the reins in February that year.

The executive board as a whole meanwhile saw their bonuses plunge 64 percent compared to 2020, to 8.6 million.

Antonio Horta-Osorio, who was appointed Credit Suisse chairman amid the turmoil last April only to be forced to resign 10 months later following revelations he violated Swiss Covid-19 restrictions, received 3.5 million francs in total compensation.

READ MORE: How Switzerland chose the franc as its currency

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


No need to boost Switzerland’s press freedoms: parliamentary committee

A Swiss parliamentary committee on Friday rejected calls to overhaul banking secrecy rules that critics warn stifle free speech in the country.

No need to boost Switzerland's press freedoms: parliamentary committee

Switzerland’s commitment to press freedom has been questioned since it was revealed that no Swiss media had dared participate in an international media investigation into the dealings of Credit Suisse.

The vast “Suisse Secrets” investigation by dozens of media organisations from around the world claimed in February that leaked data revealed how Switzerland’s second largest bank held more than $8 billion in accounts of criminals, dictators and rights abusers.

Credit Suisse flatly rejected the “allegations and insinuations” in the probe.

While the investigation focused on the bank’s alleged handling of dirty money, it also shone a spotlight on Article 47 of Switzerland’s Banking Act, which critics say has weakened media freedom in the country.

READ ALSO: ‘Swiss Secrets’: What would EU blacklisting mean for Switzerland?

Experts say the 2015 law, which made it a criminal offence to reveal leaked banking data punishable with up to five years in prison, effectively silences insiders or journalists who may want to expose wrongdoing within a Swiss bank.

Risk ‘too big’

So while 48 media companies from around the world participated in the Suisse Secrets investigation, no Swiss news media took part due to the risk of criminal prosecution.

“The judicial risk is simply too big,” the large Tamedia media group, which has taken part in previous international data leak investigations, acknowledged at the time.

The United Nations’ top expert on freedom of expression, Irene Kahn, wrote to the Swiss government in March to voice her concerns about the law.

“The Swiss banking law is an example of the criminalisation of journalism,” she said in an interview with the Tages-Anzeiger daily this week, warning that this could result in self-censorship.

Amid the criticism, the Economic Affairs and Taxation Committee of the Swiss parliament was asked to examine calls for an overhaul of the legislation.

After hearing arguments from the banking sector and from experts on financial crime and media rights, the committee members rejected the call to change the law, a parliamentary statement said Friday.

“The majority of the commission did not find it necessary to intervene at a legislative level,” it said.

The committee, which is tasked with discussing and providing recommendations on issues before they are debated in the full parliamentary chamber, highlighted the progress made by Swiss banks in recent years in addressing money laundering and other economic crimes.

Now, “they are in line with international standards,” the statement said.

It also cautioned that changing the law could result in “public accusations targeting individuals”, without providing further details. And the committee members stressed that “no journalist had ever been convicted until now by a court of violating Act 47”.