Topline
Credit Suisse Chairman Axel Lehmann Tuesday apologized to the bank’s shareholders, saying he was “truly sorry” for failing to stem its collapse last month which led to its takeover by rival Swiss lender UBS for just $3.3 billion (CHF 3 billion).
Credit Suisse chairman Axel Lehmann gestures as he speaks during the annual general meeting of … [+]
Key Facts
Speaking at the bank’s annual shareholders meeting, Lehman said he understood “the bitterness, the anger and the shock” and apologized for failing to “stem the loss of trust that had accumulated over the years.”
Lehman blamed the bank’s problems on its failure to “stem the impact of legacy scandals, and counter negative headlines with positive facts.”
Lehman said he believed a “successful turnaround” of Credit Suisse was possible and the company was working towards that goal until “that fateful week in March our plans were disrupted.”
Tuesday’s meeting in Zurich was the first opportunity for shareholders to confront the bank’s leadership in person following its dramatic government-orchestrated takeover by UBS last month.
The Swiss government used its emergency powers to carry out the merger allowing it to circumvent Credit Suisse’s shareholders who were almost completely wiped out.
Key Background
Last month, UBS announced it would buy its crisis-ridden rival Credit Suisse for $3.3 billion in a deal brokered by the Swiss government. The deal was carried out amid concerns that Credit Suisse’s collapse could snowball into a wider contagion affecting other major banks in the country and the rest of Europe. The merger would see Credit Suisse shareholders receiving UBS stock worth only CHF 0.76, less than half of Credit Suisse’s CHF 1.86 share price when markets closed that week. The deal has faced intense criticism from several quarters with investors saying that it severely dents Switzerland’s image as a Global financial and banking hub. Political leaders and Swiss citizens have expressed concerns about the massive size of UBS following the merger and the amount of taxpayer funded support it may receive.
Tangent
Credit Suisse and its leadership have been at the center of a multitude of scandals of the past few years. In 2021, the investment bank reported losses of $5.5 billion and $1.72 billion following the collapses of the U.S.-based hedge fund Archegos Capital and Greensill Capital respectively. A year later, the bank came under the scrutiny of the U.S. House oversight committee for its handling of information about assets linked to sanctioned Russian oligarchs following the invasion of Ukraine. In October last year, social media rumors about the financial health of the lender triggered panic in the market and caused a wave of withdrawals from customers. Last month, just weeks before the UBS takeover, the bank disclosed it had found “material weaknesses” in its financial reporting processes for 2021 and 2022 that could have resulted in “misstatements” of financial results.
Further Reading
Credit Suisse Chairman ‘Truly Sorry’ for Failure to Stem Crisis (Bloomberg)
UBS Buying Rival Credit Suisse In $3.2 Billion Rescue Deal (Forbes)
Another Credit Suisse Crisis: Bank Finds ‘Material Weaknesses’ In Its Financial Reporting (Forbes)
Source: https://www.forbes.com/sites/siladityaray/2023/04/04/truly-sorry-credit-suisse-chairman-apologizes-to-shareholders-for-banks-failure/