ZURICH (Reuters) – The chairman of Credit Suisse (CSGN.S) has apologized for pushing the Swiss bank to the brink of bankruptcy, as it faced shareholder anger over the demise of the once proud flagship.
The hastily arranged takeover by Zurich-based UBS (UBSG.S), over which Switzerland has applied emergency legislation, bypassed Credit Suisse shareholders, who would otherwise have a say, and wiped them all out.
Tuesday’s latest meeting of shareholders marks an ignominious end for the 167-year-old bank founded by Alfred Escher, a Swiss magnate named after King Alfred I, who helped build the country’s railways and then the bank.
Protesters gathered outside the concert venue where the meeting took place, and some set up an overturned boat to film Bank’s death.
Inside, chairman Axel Lehmann issued an apology, saying he had run out of time to change course for the bank, though he believed “until the start of the ill-fated week” it could continue.
“I’m really sorry,” Lyman said. “I apologize that we can no longer stop the loss of trust.”
After years of scandal and losses, Credit Suisse was brought to the brink of collapse before UBS was bailed out by a merger engineered and financed by Swiss authorities.
“Until the end, we fought hard to find a solution. But in the end, there were only two options: deal or bankruptcy. The merger had to happen.”
Shareholder advisory firm Ethos decried the “greed and incompetence of its directors” as well as salaries that had reached “unimaginable heights”, as it prepared to challenge its top executives at the meeting.
“Shareholders have lost huge amounts of money and thousands of jobs are at stake,” she said.
The first public address
The meeting is the first time Lehmann Chairman and CEO Ulrich Korner has addressed shareholders publicly since the acquisition.
Credit Suisse was trying to put the past behind it and restructure, before the shockwave of the Silicon Valley bank collapse in the US sent it into a spiral.
After a flood of 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 not only angered shareholders, but many in Switzerland. A poll by the political research firm gfs.bern found that a majority of Swiss do not support the deal.
“The government’s use of emergency powers to advance this deal goes beyond legal and democratic standards,” said Dominique Gross of the Swiss Alliance of Development Organisations.
“Swiss taxpayers are also on the hook for billions of francs of unwanted investments, yet the government (regulatory body) FINMA and the central bank gave little explanation about the state guaranteeing a loss of 9 billion francs to UBS.”
Norway’s sovereign wealth fund, one of the world’s largest investors, said it would vote against the re-election of Lehmann and six other directors, in a public show of protest.
An advisor to the US Agency for Institutional Shareholder Services (ISS) had earlier criticized the bank’s management for “lack of oversight and weak oversight”.
In the run-up to Tuesday’s meeting, Credit Suisse said it had pulled some proposals from the agenda.
These include management discharges, which are usually the leaders of the trust. It also gave up special bonus plans linked to the bank’s turnaround plan.
The impending collapse of Credit Suisse also wiped out an additional $17 billion in Tier 1 (AT1) debt.
A group of AT1 investors has hired the law firm of Quinn Emanuel Urquhart & Sullivan to demand compensation.
Meanwhile, the Public Prosecutor’s Office said on Sunday that the Swiss Federal Prosecutor General had opened an investigation into the Credit Suisse takeover.
($1 = 0.9129 Swiss francs)
(Reporting by Noel Ellen) Editing by Lincoln Feast, Jason Neely, and Barbara Lewis
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