'I Am Truly Sorry,' Credit Suisse's Chairman Axel Lehmann On The Bank's Collapse

From being Switzerland¡¯s second-biggest bank to reaching the brink of bankruptcy and ultimately agreeing to a rescue deal to merge with its bigger rival UBS, Credit Suisse has had a tough few weeks or rather months.

What Credit Suisse Chairman Said

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Facing growing anger among the customers and investors, the scandal-hit bank's chairman Axel Lehmann recently apologised for taking the bank to the brink of bankruptcy.

The takeover of Credit Suisse by Switzerland¡¯s biggest bank UBS bypassed Credit Suisse shareholders, who would otherwise have had a say.

Its final meeting of shareholders on Tuesday marks the end of the 167-year-old bank founded by Alfred Escher, a Swiss magnate affectionately dubbed King Alfred I, who helped to build the country's railways and then the bank, as per Reuters.

Protesters gathered outside the concert venue where the meeting took place. Inside, Credit Suisse chairman Axel Lehmann issued an apology to the nearly 2,000 shareholders in attendance, saying he had run out of time to turn the bank around, despite his belief "until the beginning of the fateful week" that it could survive.

"I am truly sorry," said Lehmann. "I apologise that we were no longer able to stem the loss of trust."

With his voice breaking, he said that 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 came up to the rescue with a merger. "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.

Also Read: UBS Likely To Layoff 36,000 Employees After Credit Suisse Merger

Shareholders Voice Their Anger

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One after another, shareholders took to the stage to voice their anger at the arranged marriage between the two banks and at the raw deal for investors.

Shareholders criticised the board of directors and former management, including Urs Rohner, who was chairman for 10 years to 2021, the report mentioned.

Many Not Happy With The Merger

After a run on deposits, the Swiss government turned to UBS, which agreed to buy Credit Suisse for 3 billion Swiss francs ($3.3 billion), which was just a fraction of its earlier market value.

The move angered not only shareholders but many in Switzerland. A survey reportedly 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, Reuters reported.

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Also Read: 'Deutsche Bank Is Not The Next Credit Suisse': Analysts

"Swiss taxpayers too are on the hook for billions of francs of junk investments and yet the government, (regulator) FINMA and the central bank have given little explanation about the state's 9 billion (franc) loss guarantee to UBS."

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.

On Tuesday, just over half of shareholders voted in favour of re-electing Lehmann as chairman - far fewer than usual and a sign of dismay. The six remaining board members were also narrowly re-elected.

The shareholders also reportedly approved pay for the board of directors for the time until the merger with UBS is complete, but voted against approving compensation for the bank's executives.

Also Read: UBS-Credit Suisse Merger Creates A Bank Twice As Big As Swiss Economy

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