Last summer, amateur rally driver Ulrich Koerner took the wheel at Credit Suisse. He won't get the checkered flag for the restructuring plans the CEO set for the bank through 2025.

At the press conference in Bern on Sunday evening announcing UBS's takeover of Credit Suisse, Ulrich Koerner was nowhere to be seen. Appointed CEO in July of last year as an emergency replacement, he is one of the big losers of the institution's forced merger with Swiss rival UBS.

UBS CEO Ralph Hamers will take over as CEO of the new combined banking group. UBS Chairman Colm Kelleher will preside over the merger entity.

Furling the Sails

Credit Suisse Chairman Axel Lehmann is already heading for the exit after just over a year in office. In the future, Credit Suisse will function as a UBS subsidiary according to the Chairman of the buyer, with the deal to be finalized in a few months. Whether the Credit Suisse logo with the sails will continue to exist is entirely at the discretion of UBS.

Koerner, a veteran of big banks, received mixed reviews when he took office in July. He was said by observers to have profound banking know-how but was not considered a good communicator nor particularly affable.

Praise and Blame

In recent months, Koerner had received some praise for his operational activities. Few know the business as well as he does. However, his long silence leading up to the announcement of the new strategy in October and fixation on the course he set proved counterproductive for Credit Suisse. This was evident when the bank lost over 120 billion Swiss francs in customer assets last year, leaving it with a much lower base from which it could generate fees.

Communication at Credit Suisse was left to Lehmann, who sometimes got himself into trouble with his statements. As recently as last Wednesday, Lehmann had declared that state aid was not on the table for the bank. At the time, the Swiss National Bank, the Federal Council, and the Swiss Financial Market Supervisory Authority (Finma) had already met behind the scenes to provide 50 billion francs in additional liquidity.

Tragic Figure

Then on Thursday, the legislative basis for the new «Public Liquidity Backstop» (PLB) was created, providing UBS and Credit Suisse with up to another 150 billion francs.

Koerner, who used to privately participate in vintage car rallies, subsequently failed to negotiate the course at Credit Suisse. Thanked for his hard work by Lehmann at Sunday's conference, the drama surrounding the country's second-largest bank leaves him as a tragic figure. His strategy, which was planned to lead to a solid asset management bank in three years, was overtaken by reality in just one week.

A Pay Cut?

It is unclear what will happen to his salary for his short stint as CEO. The Credit Suisse board of directors awarded Koerner a total salary of 2.5 million francs for 2022. The Federal Council has ordered measures in compensation as long as the bank claims state support, and the payment of variable compensation can be banned altogether.

But there is no bonus for Credit Suisse management.