© Reuters. FILE PHOTO: The Credit Suisse bank logo is seen outside its office building in Hong Kong, China, March 20, 2023. REUTERS/Tyrone Siu/File Photo
By Noele Illien and John O’Donnell
ZURICH (Reuters) – Credit Suisse will face the wrath of shareholders on Tuesday at what will be its last annual general meeting after the bank was rescued last month by Swiss rival UBS.
The hastily arranged takeover by Zurich-based UBS, for which Switzerland invoked emergency legislation, bypassed Credit Suisse shareholders, who would otherwise have had a say, and largely wiped out the value of their shares.
Tuesday’s shareholder meeting marks an ignominious end for the 167-year-old flagship bank founded by Alfred Escher, a Swiss tycoon affectionately nicknamed King Alfred I, who helped build the country’s railways and later Credit Suisse.
After years of scandals and losses, Credit Suisse was on the brink of collapse before UBS came to the rescue with a forced merger engineered and financed by the Swiss authorities.
The meeting is the first time that Chairman Axel Lehmann and Chief Executive Ulrich Koerner will address shareholders publicly since the acquisition was announced.
Credit Suisse had been trying to put the past behind it and restructure itself, before the shock of the collapse of Silicon Valley Bank in the US sent it into a spiral.
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), a fraction of its previous market value.
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 protest demonstration.
US proxy advisor Institutional Shareholder Services (ISS) had earlier chided the bank’s management for “lack of supervision and mismanagement”.
Before Tuesday, Credit Suisse said it had removed certain proposals from the meeting’s agenda.
Those include firing management, which is usually an indicator of confidence. He also abandoned plans for a special bonus linked to the bank’s transformation plan.
The near collapse of Credit Suisse not only wiped out billions of Swiss francs from the value of its shares. It also completely wiped out $17 billion of additional Tier 1 (AT1) debt.
A group of AT1 investors has hired the Quinn Emanuel Urquhart & Sullivan law firm to demand compensation.
Meanwhile, the attorney general’s office said on Sunday that Switzerland’s federal prosecutor has opened an investigation into the Credit Suisse acquisition.
The prosecutor is investigating possible breaches of Swiss criminal law by government officials, regulators and executives of the two banks.
($1 = 0.9129 Swiss francs)
