Axel Lehmann, the chairman of Credit Suisse, issued an apology to shareholders at its final meeting on Tuesday. Lehmann took responsibility for the bank’s downfall, acknowledging the loss of trust that had led to the bank being taken over by UBS.
Shareholders, who had been critical of the deal and the lack of involvement in the decision-making process, voiced their anger at the board of directors and former management.
The hastily arranged takeover by Zurich-based UBS, for which Switzerland invoked emergency legislation, bypassed Credit Suisse shareholders, who would otherwise have had a say, and all but wiped them out.
Credit Suisse: The end of an era
The final meeting of Credit Suisse shareholders marks an ignominious end to the 167-year-old bank founded by Alfred Escher, a Swiss magnate who helped to build the country’s railways and then the bank.
Protesters gathered outside the concert venue where the meeting took place, with some erecting a capsized boat to depict the bank’s demise.
Lehmann, with his voice breaking, expressed his deep regret at the turn of events, saying “Credit Suisse with its long and rich history is now taking a historic turn, we deeply regret this and, personally, this moment also makes me sad.”
After years of scandal and losses, Credit Suisse came to the brink of collapse before UBS rode to the rescue with a merger engineered and bankrolled by the Swiss authorities.
“Until the end, we fought hard to find a solution. But ultimately, there were only two options: deal or bankruptcy. The merger had to go through,” said Lehmann.
He added that five board members would not stand for re-election. Shareholder advisory firm Ethos decried the “greed and incompetence of its managers” as well as pay that reached “unimaginable heights”.
Public outcry and criticism
The move angered not only shareholders but many in Switzerland. A survey by political research firm gfs.bern found a majority of Swiss did not support the deal.
“The government’s use of emergency powers to push this deal through goes beyond legal and democratic norms,” said Dominik Gross of the Swiss Alliance of Development Organisations.
One of the world’s biggest investors, Norway’s sovereign wealth fund, said it would vote against the re-election of Lehmann and six other directors, in a public show of protest.
Credit Suisse’s near collapse wiped out $17 billion of Additional Tier 1 (AT1) debt. A group of AT1 investors has hired law firm Quinn Emanuel Urquhart & Sullivan to demand compensation.
Meanwhile, the office of the attorney general on Sunday said Switzerland’s Federal Prosecutor has opened an investigation into the Credit Suisse takeover.
Credit Suisse had been attempting to put the past behind it and restructure before a shock triggered by the collapse of Silicon Valley Bank in the U.S. sent it into a spiral.
With the merger now approved, the focus turns to how UBS will integrate the struggling bank into its own operations. For the banking industry as a whole, the collapse of Credit Suisse will be seen as a cautionary tale of what can happen when mismanagement, scandal, and losses are not addressed in a timely manner.
