ZURICH – At Credit Suisse’s annual general meeting (AGM) in Zurich on Tuesday, shareholders voted to re-elect chairman Axel Lehmann, but rejected the compensation for the executive board.
Of the votes cast, 55.67 per cent were in favour of keeping Mr Lehmann as chairman for the remainder of the time until the Swiss bank is officially merged with larger rival UBS Group, as part of a forced takeover orchestrated by the Swiss authorities. The remaining board members were all narrowly re-elected by shareholders.
Mr Lehmann apologised to shareholders for failing to stem a loss of trust in the bank that he said had built up well before he took over. “We failed to stem the impact of legacy scandals, and counter negative headlines with positive facts,” he said. In the end, “the bank could not be saved”.
The public mea culpa comes as shareholders confront leadership over the historic takeover by UBS that marks the end of Credit Suisse after 167 years. The 3 billion Swiss franc (S$4.4 billion) deal was sealed in March to put an end to a crisis of confidence after years of scandals, losses and failures in risk management. Fragile investor sentiment around banking was further hurt by the failure of Silicon Valley Bank in the United States.
Credit Suisse shareholders got their first chance to voice their frustrations over the beleaguered bank’s takeover by UBS on Tuesday. Held in Zurich’s hockey stadium, the AGM was the first occasion in years where investors were able to confront management face to face. Previous meetings were held virtually due to the Covid-19 pandemic.
Due to a string of scandals, shareholders have seen the value of their investment plunge from 12.78 Swiss francs per share in February 2021 to the 0.76 Swiss franc they will receive in the buyout by UBS.
The creation of one huge bank has also caused unease across Switzerland, with regular businesses, mortgage seekers and account holders seeing choice and competition shrink dramatically.
The deal was agreed without the approval of Credit Suisse’s or UBS’ shareholders, underscoring the urgency for the Swiss government to orchestrate a solution. In announcing the acquisition, it cited an article of the Constitution that allows it to issue temporary ordinances “to counter existing or imminent threats of serious disruption to public order or internal or external security”. In this case, this included overriding merger laws on shareholder votes.
“We wanted to put all our energy and our efforts into turning the situation around and putting the bank back on track,” Mr Lehmann said. “It pains me that we didn’t have the time to do so, and that in that fateful week in March, our plans were disrupted. For that I am truly sorry.”
UBS is holding its own AGM in Basel on Wednesday, and the tone of the Credit Suisse meeting could feed into the mood when UBS chiefs face their shareholders.
Credit Suisse is one of 30 Global Systemically Important Banks – deemed of such importance to the international banking system that they are considered too big to fail. But the markets saw it as a weak link in the chain following the collapse of two US banks.
Credit Suisse’s share price plunged by more than 30 per cent on March 15 to a record low of 1.55 Swiss francs. Despite the Swiss National Bank (SNB) offering a US$54 billion (S$72 billion) lifeline, shares closed at 1.86 francs on March 17.
Fearing a collapse that could have triggered an international banking crisis, SNB and the government strong-armed UBS into a deal before the markets reopened on March 20. AFP, BLOOMBERG, REUTERS
