Credit Suisse chairman says 'truly sorry' for bank's collapse at last AGM

Credit Suisse Chairman Axel Lehmann on Tuesday apologised to the shareholders for failing to contain the crisis, which led to its closure. In an emotional speech at Credit Suisse's last annual general meeting, chairman Axel Lehmann spoke of being caught off guard, pain, bitterness, accumulated scandals, and the grief that remains.

The Swiss banking major's takeover by Zurich-based UBS was hastily arranged on March 19 by the Swiss government to prevent a global financial meltdown, following the collapse of banks, like Silicon Valley Bank, in the US. The AGM was the first time that Lehmann and CEO Ulrich Koerner publicly addressed shareholders since the takeover.

In his opening address at the last AGM,  Lehmann said 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 said: "It is a sad day. For all of you, and us. The bitterness, anger, and shock of all those who are disappointed, overwhelmed, and affected by the developments of the past few weeks are palpable." 

Lehmann, who has been chairman for a year, added: "We wanted to put all our energy and our efforts into turning the situation around and putting the bank back on track. It pains me that we didn’t have the time to do so and that in that fateful week in March, our plans were disrupted. For that, I am truly sorry. I apologise that we were no longer able to stem the loss of trust that had accumulated over the years and for disappointing you."

The last AGM, which was organised in Zurich, marked the ignominious end for the 167-year-old flagship bank founded by Alfred Escher, a Swiss magnate affectionately dubbed King Alfred I, who helped build the country's railways and then the bank.

In his speech, Lehmann told the shareholders that those responsible gave it their all to attempt a successful turnaround. He said that he and CEO Ulrich Koerner were been aware that such a profound strategic and cultural transformation would take time, and that the bank would be most vulnerable in the first year of implementation. 

Lehmann on Tuesday added: "The decline of Credit Suisse, the circumstances, and various influencing factors can no longer be changed. What remains is, understandably, disappointment, bitterness and sadness about the end of a bank that we continued to believe in."

Earlier it was reported that the merger could see up to 36,000 jobs being cut across the world. On Sunday, 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, according to the weekly, which did not provide details of which posts could be targeted. Before the merger, UBS and Credit Suisse employed slightly more than 72,000 and 50,000 people, respectively.

In recent years, Credit Suisse was embroiled in a series of scandals and faced losses. In March, its share price collapsed after its largest shareholder Saudi National Bank said it was not open to further cash injections. The news didn't go down well with the investors as around that time its CEO Ulrich Koerner sought to shore up investors' confidence by pointing to signs of improvement in its business.

The quick takeover

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".

(With Reuters inputs)

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