Credit Suisse, one of the oldest and largest Swiss banks, has been in the news for all the wrong reasons in recent years. It has been embroiled in a series of scandals, faced losses, and witnessed a significant drop in its share price. The Swiss government's intervention and hasty takeover by Zurich-based UBS have brought an ignominious end to the 167-year-old flagship bank founded by Alfred Escher, a Swiss magnate affectionately dubbed King Alfred I.
In an emotional speech at Credit Suisse's last annual general meeting, chairman Axel Lehmann apologised to the shareholders for failing to contain the crisis, which led to its closure. Lehmann spoke of being caught off guard, pain, bitterness, accumulated scandals, and the grief that remains. The AGM was the first time that Lehmann and CEO Ulrich Koerner publicly addressed shareholders since the takeover.
Lehmann admitted that 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. He expressed his pain and sadness that they were no longer able to stem the loss of trust that had accumulated over the years and for disappointing the shareholders. Lehmann told the shareholders that those responsible had given it their all to attempt a successful turnaround. He said that he and CEO Ulrich Koerner were aware that such a profound strategic and cultural transformation would take time, and the bank would be most vulnerable in the first year of implementation.
The decline of Credit Suisse, the circumstances, and various influencing factors can no longer be changed, said Lehmann. What remains is, understandably, disappointment, bitterness, and sadness about the end of a bank that they continued to believe in. Earlier, it was reported that the merger could see up to 36,000 jobs being cut across the world. Swiss newspaper SonntagsZeitung Weekly said management was mulling cutting between 20 per cent and 30 per cent of the workforce, meaning between 25,000 and 36,000 jobs across countries. About 11,000 jobs could be cut in Switzerland alone.
The takeover move reportedly angered not only the shareholders but many others in Switzerland. A survey by political research firm gfs.bern 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 as quoted by Reuters.
"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," it added. 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. US proxy advisor Institutional Shareholder Services (ISS) had also rebuked the bank's management for a "lack of oversight and poor stewardship."