Credit Suisse shareholders upbraided the Swiss bank's leaders on Tuesday for years of mismanagement, scandal, and obfuscation that sent its stock price into the gutter, while executives apologised and insisted that the only way forward for the once-venerable lender was a government-engineered takeover by rival UBS.
A largely polite — if at times boisterous, emotional, angry, and even humorous — mood pervaded at the first in-person shareholder meeting in four years and likely the last in the bank's 167-year history: Credit Suisse is set to be swallowed by its crosstown competitor in the coming months in a deal that was forced through without a shareholder vote.
Despite speech after speech airing concerns ranging from Switzerland's role in global finance to environmental impact to wiped-out pension savings, shareholders narrowly approved a compensation plan for last year that will pay out millions to executives and board members.
Investors also reelected board members who will shepherd the bank into UBS's arms.
Axel Lehmann, who became Credit Suisse chairman only last year after joining the bank from UBS in 2021, decried “massive outflows” of customer funds in October and a “downward spiral” that culminated last month as a US banking crisis unleashed global financial turmoil.
“The bank could not be saved,” he said, and only two options awaited — a deal or bankruptcy.
“The bitterness, anger and shock of those who are disappointed, overwhelmed and affected by the developments of the past few weeks is palpable,” Lehmann said.
Also read: Lessons from global banking crisis
“I apologise that we were no longer able to stem the loss of trust that had accumulated over the years and for disappointing you.” The bank's pending demise has been years in the making, with critics blaming a blend of greedy managers, either unsuspecting or toothless regulators, government officials asleep at the wheel, and international pressure for profits and financial market stability at the expense of Switzerland's generally staid and conservative culture.
At times at Tuesday's shareholder meeting, US finance and allegations of American bullying were a target.
A couple dozen protesters, including some hoisting a severed boat labelled “Crisis Suisse,” gathered outside the Zurich hockey arena hosting the annual meeting, while shareholders and employees voiced their grievances as they got their last crack at managers.
Stepping to a podium, one blasted “bonus mania," and another used a metaphor from Christianity to repeatedly ask, “When is enough, enough?”
Yet another held up walnuts as props, saying, “A bag of these is worth about one share.”
One young investor took off his shirt to reveal a T-shirt with the words “Stop the Swindle” written in red.
Shareholder Guido Röthlisberger said he wore a red tie “to represent the fact that I and plenty of others today are seeing red." "I rather feel that I've been cheated by these institutions,” he said.
Swiss government officials hastily orchestrated the $3.25 billion takeover of Credit Suisse by UBS two weekends ago after Credit Suisse's stock plunged and jittery depositors quickly pulled out their money.
Political leaders, financial regulators and the central bank feared a teetering Credit Suisse could further roil global financial markets following the collapse of two US banks.
Need for transparency
Shareholders did not get to vote on the deal after the government passed an emergency ordinance to bypass the step. Some came to the annual meeting to hear managers explain what went wrong.
“The whole thing — how this happened — makes me a little bit angry,” shareholder Markus Huber said.
Huber, a 56-year-old self-employed handyman, suspected government officials and bank leaders cooked up the deal “in secrecy” and said there should have been greater transparency.
Shareholders felt “a little bit astonished that there hadn't been warnings out before,” he said.
The takeover, however, wasn't on the docket for the meeting, the first held in person since 2019 because of the Covid-19 pandemic.
For the thousands in the arena, many of them seemingly Swiss retirees, the speeches amounted to a collective outcry about a once-fabled bank gone bust — and with it a bit of Swiss pride.
In 2007, Credit Suisse shares fetched as much nearly 88 Swiss francs (dollars). Today, they're trading at about 80 cents.
The bank swooned from scandal to scandal in recent years: Bad bets on hedge funds; accusations it didn't report secret offshore accounts wealthy Americans held to avoid paying US taxes; failing to prevent money laundering by a Bulgarian cocaine ring.
The Swiss attorney general's office says it's opened a probe into events surrounding Credit Suisse ahead of the UBS takeover. Executives hope that the deal will close in coming months but acknowledged a complex transaction.
For Credit Suisse investors, the deal has meant losses. Shareholders collectively will get 3 billion francs ($3.3 billion) in the combined company, while investors holding about 16 billion francs ($17.3 billion) in higher-risk bonds were wiped out.
Typically, shareholders face losses before those holding bonds if a bank goes under.
Swiss regulators, who will hold a news conference on Wednesday, say contracts show the bonds can be written down in a “viability event.”
Global law firm Quinn Emanuel said bondholders have hired the firm to “represent them in discussions with Swiss authorities and possible litigation to recover losses.”