Credit Suisse: president apologizes; shareholders criticize – 04/04/2023 – Market

The chairman of Credit Suisse has apologized for pushing the Swiss bank to the brink of collapse as it faces fury from shareholders over the demise of Switzerland’s second-biggest financial institution.

The bank’s emergency takeover by Swiss rival UBS bypassed Credit Suisse shareholders.

Tuesday’s final shareholder meeting marks a dishonorable end for the 167-year-old bank founded by Alfred Escher, a Swiss tycoon nicknamed King Alfred I, who helped build the country’s railways and later the bank.

Protesters gathered outside the meeting place, some lifting an overturned boat to portray the end of the bank.

Inside, chairman Axel Lehmann issued an apology, saying he had run out of time to turn the bank around, despite believing “until the start of the fateful week” that the bank could survive.

“I’m really sorry,” Lehmann said. “I apologize that we were no longer able to contain the loss of confidence.”

After years of scandals and losses, Credit Suisse came to the brink of collapse before UBS bought it in a deal engineered and funded by the Swiss government.

“Until the end, we fought hard to find a solution. But at the end of the day, there were only two options: deal or bankruptcy. The merger had to happen,” said Lehmann.

Shareholder advisory firm Ethos criticized the “greed and incompetence of its managers” as well as salaries that reached “unimaginable heights” as it prepared to challenge executives at the meeting.

“Shareholders have lost considerable amounts of money and thousands of jobs are at risk,” he said.

The meeting is the first time that Chairman Lehmann and Chief Executive Ulrich Koerner have publicly addressed shareholders since the acquisition.

SVB bankruptcy was the final blow

Credit Suisse had been trying to leave the past behind and restructure itself, before a shock triggered by the collapse of the Silicon Valley Bank (SVB), in the United States, sent it into a spiral.

After a run on deposits, the Swiss government turned to UBS, which agreed to buy Credit Suisse for CHF3 billion ($3.3 billion), a fraction of its previous market value.

The move angered not just shareholders but many in Switzerland. A survey by the company gfs.bern showed that a majority of Swiss do not support the agreement.

“The government’s use of emergency powers to carry out this agreement goes beyond legal and democratic norms,” ​​said Dominik Gross of the Swiss Alliance of Development Organizations.