The 167-year-old history of the Swiss bank Credit Suisse came to its conclusion at a hockey stadium in the north of Zurich Tuesday. With security at his side, the bank’s last chairman, Axel Lehmann, told nearly 2,000 angry shareholders that he was “truly sorry” for the storied institution’s collapse, which forced fellow Swiss lender UBS into a controversial takeover last month.
“I apologize that we were no longer able to stem the loss of trust that had accumulated over the years, and for disappointing you,” he said at the bank’s final shareholder meeting, flanked by police security. “I can understand the bitterness, the anger, and the shock of all those who are disappointed, overwhelmed, and affected by the developments.”
Lehmann, who became Credit Suisse’s chairman in January 2022 and previously served as a board member and the head of the risk committee, said that he fought hard “until the end” to save the bank, “but ultimately there were only two options: deal or bankruptcy. The merger had to go through.”
UBS’s takeover of Credit Suisse may have been the only option, but nearly half of Swiss economists believe that it wasn’t the right one, according to a new poll from Switzerland's KOF economic research institute, as it will damage the country’s once-sterling banking reputation.
Shareholders didn’t hold back their frustrations with the merger or Lehmann and his fellow executives at the meeting. Vincent Kaufmann, CEO of the shareholder advisory firm Ethos Foundation, which represents between 3% and 5% of Credit Suisse’s shareholders, decried the "greed and incompetence” of the bank’s managers and argued that executive pay reached "unimaginable heights.”
"Shareholders have lost considerable amounts of money and thousands of jobs are on the line," he said, CNBC first reported.
Credit Suisse's failure also wiped out $17 billion worth of Additional Tier 1 (AT1) debt—a type of bond that can be converted into equity and doesn’t offer the same protections as normal debt securities. The law firm Quinn Emanuel Urquhart & Sullivan is representing a "significant percentage" of Credit Suisse’s AT1 investors who lost money during the collapse, and the legal team is in contact with Swiss authorities about litigation to recover losses. At the shareholder meeting Tuesday, they demanded compensation for their clients as another individual shareholder addressed the audience saying that he wore his red tie in order to “represent the fact that I and plenty of others today are seeing red,” according to the Wall Street Journal.
Officials at Switzerland’s federal prosecutor said Sunday that they are investigating potential breaches of Swiss criminal law by government officials, regulators, and executives at Credit Suisse and UBS, noting “numerous aspects of events around Credit Suisse” warrant attention.
Credit Suisse was founded in 1856 by Alfred Escher to help fund the development of Switzerland’s railway system, and it once dominated the global IPO market, but in recent years the bank had its fair share of issues.
After taking a $5 billion hit from the collapse of the hedge fund Archegos and another $1.7 billion blow from its involvement with the now-defunct financial services firm Greensill Capital in 2021, depositors at the bank began heading for the exits. In 2022 alone, deposits fell 40% to $252 billion. And the downfall of Silicon Valley Bank last month only made Credit Suisse’s problems worse as investors began to look for other troubled lenders that could face issues.
Now, the banks’ shareholders, bond holders, and former partners—including the Saudi National Bank—have all been left in the dust after the UBS takeover.
Credit Suisse’s final CEO, Ulrich Koerner, who took control of the bank in 2021 after numerous scandals and heavy losses, had launched a massive strategic overhaul in an attempt to fix the bank’s issues and underperformance. But on Tuesday, he admitted his plans just didn’t come to fruition.
“In short, I wanted to create an organization that our shareholders, our clients and all our employees could be proud of. Unfortunately, we didn’t succeed in the end. We ran out of time. This fills me with sorrow,” he said. “What has happened over the past few weeks will continue to affect me personally and many others for a long time to come.”
This story was originally featured on Fortune.com
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