Credit Suisse management apologizes

At the last Annual General Meeting of Credit Suisse, President Axel Lehmann apologized to angry shareholders for the downfall of the traditional institution. He is sorry that the turnaround failed, he said on Tuesday. “I apologize for the fact that we were no longer able to stop the loss of trust that had built up over the years, that we disappointed you all.” The small investors went to court with the top management. “CS was ruined by those responsible,” said one. “They wanted to play in the top league, no matter what the cost. Instead, they threw scandal after scandal.”

In mid-March, the Swiss government orchestrated an emergency takeover of Credit Suisse by rival UBS after a bank run brought the 167-year-old institution to the brink of insolvency. “Until the beginning of the fatal week, I believed in a successful turnaround,” explained Lehmann. But rising interest rates, inflation and the loss of confidence, together with the problems of American banks, have caused a conflagration. “The bank could no longer be saved.”
A small shareholder, on the other hand, made board members and managers responsible for the crash. “Credit Suisse didn’t fail because of market distortions, but rather because of the lack of control at the top of the company. The sufferers are the employees, who had to spoon up the soup that the highly praised elite brought us.” Experts reckon that the merger of UBS and Credit Suisse, which currently has more than 120,000 employees, could cost thousands or even tens of thousands of jobs.

Proxy Advisor: High bonuses are to blame

President Lehmann and CEO Ulrich Körner addressed the shareholders publicly for the first time since the rescue operation. However, around 1,750 owners were not allowed to comment on the takeover, nor were UBS shareholders at their upcoming general meeting on Wednesday. The deal was enforced with emergency law.

The fact that the traditional bank was able to get to this point is due to a long series of failures that made Credit Suisse the number one problem child among European banks. In the last financial year alone, the bank made a loss of CHF 7.3 billion. Swiss proxy advisor Ethos said it could not have prevented “a flagship of the Swiss economy from disappearing due to the greed and incompetence of its managers.” The shareholders would have lost an enormous amount of money. The high bonuses are one of the reasons why some employees have taken ever greater risks. In a consultative vote, only a wafer-thin majority voted in favor of the remuneration report.

The 2023 AGM marks the ignominious end of the bank founded by entrepreneur Alfred Escher to finance the construction of the Swiss railway network and the tunnel through the Gotthard. Demonstrators gathered in front of the event hall, setting up a capsized boat to represent the sinking of the bank. Five long-standing board members, whose re-election the influential Norwegian sovereign wealth fund had rejected, resigned at short notice.

“A shame for Switzerland”

Körner explained that the announcement of the takeover by UBS for CHF 3 billion immediately created stability and now allows an orderly transition. He will “do everything to ensure that this merger is completed and that the great potential of the two banks is fully implemented.” When the deal was announced, UBS said the merger would be completed within a few weeks or a few months.

But Credit Suisse shareholders feared that the end of the bank would have long-lasting effects. “It’s a shame for Switzerland. In doing so, we have jeopardized the confidence in the Swiss banking center,” said a small shareholder. Not only the shareholders, but also the representatives of all government parties expressed reservations. The majority of the Swiss population also rejects the solution. In the week after Easter, the Swiss parliament will debate the consequences of the rescue. Even if the cornerstones of the deal are unlikely to be shaken, it is conceivable that UBS’s parliament will make new specifications.

hb/tko (rtr)