Credit Suisse yesterday held what is most likely going to be its last Annual General Meeting as an independent firm – unpacking its sudden takeover by UBS and the impacts this will have on stakeholders.
UBS agreed to take over Credit Suisse in a deal worth more than $3.25 billion at the end of March, moving forward without the approval of shareholders under emergency ordinance issued by the Swiss Federal Council.
The Swiss National Bank said the takeover provides a solution “to secure financial stability and protect the Swiss economy in this exceptional situation”.
Axel Lehmann, chairman of Credit Suisse, started off his address this morning by admitting the firm “stands here today in a situation no one could have expected”.
Lehmann has served as chairman for little over a year and stated that he was aware of the size of the task of restoring the bank, the accumulated problems, the time pressure as well as the difficult geopolitical and macroeconomic environment.
“It was absolutely clear to us that we needed a comprehensive, strategic and cultural transformation. The business model had to be fundamentally overhauled,” said Lehmann.
“Until the end, we fought hard to find a solution. Ultimately, there were only two options: deal or bankruptcy. The merger had to go through; the terms had to be accepted. The only alternative would’ve been a restructuring under Swiss banking law which would’ve led to the worst scenario. Namely: a total loss for shareholders, unpredictable risks for clients and severe consequences for the economy and global financial markets.”
Chief executive officer Körner highlighted that the bank’s survival was at stake and it had to act quickly and resolutely.
“The collapse of Credit Suisse would’ve been disastrous not just for Switzerland, but for the global economy at large. Together with the Swiss government, the Federal Council, the Swiss National Bank and FINMA, we worked hard to find possible solutions within a limited time frame. In the end, the merger with UBS was the only feasible option,” said Körner.
“After 167 years, Credit Suisse is giving up its independence.”
Following the announcement of the deal last month, investors began gearing up for litigation following the decision by the Swiss regulators to pay Credit Suisse equity-holders CHF3 billion whilst writing down the value of AT1 debtholders to zero – which could include investors challenging the Swiss government, suing FINMA, or suing Credit Suisse.