ZURICH, Switzerland – April 4, 2023: Credit score Suisse chairman Axel Lehmann opens the annual normal assembly of Credit score Suisse, after the Swiss authorities organized its takeover by UBS on March 19 to stop a monetary meltdown.
FABRICE COFFRINI/AFP by way of Getty Photographs
Credit score Suisse Chairman Axel Lehmann on Tuesday advised shareholders he was “really sorry” for the collapse that led to the financial institution’s controversial takeover by UBS.
“It’s a unhappy day for you and for us too. I can perceive the bitterness, the anger and the shock of all those that are disillusioned, overwhelmed and affected by the developments,” Lehmann mentioned on the financial institution’s annual assembly, the primary time its leaders have addressed the general public because the rescue.
“I apologize that we have been now not in a position to stem the lack of belief that had accrued through the years, and for disappointing you.”
A police presence was established early Tuesday on the venue, as protesters and shareholders started arriving in droves, hoping for solutions and accountability following the demise of the 167-year-old Swiss establishment.
Swiss authorities brokered an emergency rescue of the stricken financial institution by its bigger home rival for simply 3 billion Swiss francs, over the course of a weekend in late March.
It adopted a collapse in Credit score Suisse’s deposits and share value amid fears of a worldwide banking disaster, however the deal stays mired in authorized and logistical challenges. Neither UBS nor Credit score Suisse shareholders have been allowed a vote on the deal.
ZURICH, Switzerland – Local weather activists increase a ship throughout a protest forward of the annual normal assembly of Credit score Suisse, following the financial institution’s unexpectedly brokered takeover by UBS to stop a monetary meltdown.
FABRICE COFFRINI/AFP by way of Getty Photographs
“Till the tip, we fought onerous to discover a answer, however finally there have been solely two choices: deal or chapter,” Lehmann, who grew to become chairman in January 2022, advised shareholders. “The merger needed to undergo.”
In a press release Sunday, the workplace of the legal professional normal confirmed that Switzerland’s Federal Prosecutor is investigating potential breaches of Swiss federal legislation by authorities officers, regulators and high executives at Credit score Suisse and UBS.
Each banks declined to touch upon Monday.
‘We ran out of time’
Credit score Suisse CEO Ulrich Koerner took over in 2021, when the financial institution was reeling from a sequence of high-profile scandals, danger administration failures and heavy losses.
In October 2022, Credit score Suisse launched a large strategic overhaul, geared toward fixing its danger and compliance tradition and addressing perennial underperformance within the funding financial institution.
Koerner advised shareholders on Tuesday that he returned to Credit score Suisse in 2021 hoping to “sort out the issues that existed and construct a brand new Credit score Suisse.”
“In brief, I wished to create a corporation that our shareholders, our purchasers and all our workers might be happy with. Sadly, we did not succeed in the long run. We ran out of time. This fills me with sorrow,” he mentioned.
“What has occurred over the previous few weeks will proceed to have an effect on me personally and plenty of others for a very long time to come back.”
Commentators have highlighted the significance of the deal’s success for Swiss authorities in opposition to a febrile political backdrop. The shortage of enter from shareholders, bondholders and Swiss taxpayers in UBS’ acquisition of its embattled rival has sparked widespread anger.
Talking exterior the annual assembly, Vincent Kaufmann, CEO of Ethos Basis which represents pension funds comprising between 3% and 5% of Credit score Suisse shareholders, advised CNBC that they’d “misplaced some huge cash” and “have to know what administration is doing.”
Potential programs of motion embrace “attempting to retrieve a few of the viable pay that was granted for former administration, who might have failed of their duties to guard shareholders’ pursuits,” he mentioned.
“We’re nonetheless on the lookout for prospects — it is fairly troublesome with the Swiss firm legislation to show the injury. Mismanagement of an organization shouldn’t be per se one thing we will concretely act in opposition to former members of the administration or present members of the administration, however nonetheless we have to ensure that they gave the entire reality to traders and to the market, so there may be nonetheless open query,” Kaufmann advised CNBC’s Joumanna Bercetche.
Holders of Credit score Suisse’s AT1 bond devices, which have been topic to a $17 billion wipeout as a part of the UBS takeover, final week instructed a worldwide legislation agency to pursue dialogue and potential litigation with Swiss authorities.
“There’s nonetheless an opportunity that the assorted actors will acknowledge and proper the errors made in unexpectedly orchestrating this merger,” Thomas Werlen, managing companion at Quinn Emanuel Urquhart & Sullivan, which is representing a “numerous array” of affected bondholders in Switzerland, the U.Ok. and U.S., mentioned in a launch Monday.
“Whereas we’re definitely ready to pursue no matter proceedings are essential, a possible constructive engagement with the related stakeholders might stop years of litigation. That might be an essential focus for us over the approaching weeks.”
UBS introduced final week that former CEO Sergio Ermotti would return to the helm of the brand new financial institution because it undertakes the massive job of integrating its fallen compatriot into its enterprise.
UBS will maintain its personal AGM on Wednesday, with additional readability anticipated on plans for the brand new built-in lender. Swiss regulator FINMA can even maintain a press convention on Wednesday.
Swiss newspaper Tages-Anzeiger reported Sunday, citing one supply, that plans for the brand new entity embrace a 20%-30% minimize to its mixed international workforce.