Years of mismanagement, scandals and a drop in share price: these are just a few of the allegations that shareholders today blame the management of Swiss bank Credit Suisse, which was recently taken over by rival UBS. Today was the last shareholder meeting and it didn’t go smoothly.
CEO Axel Lehmann apologized and anger came from Credit Suisse shareholders. Because not only is the bailout not complete without a vote, they’re also in financial trouble. Bankruptcy was narrowly averted, but the bailout bubbled out of billions of assets.
‘No croissants yet’
According to CNN, one of today’s shareholders stated that the price of Credit Suisse stock is no longer enough to even buy a croissant. Although before it was enough for “an expensive bottle of French wine in a restaurant”.
Lehmann, who became Chairman of Credit Suisse after leaving UBS but last year, denounced the “big outflow” of client funds less than six months ago. He spoke of a “downward spiral” that peaked last month. For Lehmann, keeping the bank afloat was not an option, it was a matter of saving it or dying.
“It’s a sad day. “For all of you and for us,” Lehmann said today in front of more than 1,700 shareholders at an ice hockey stadium in Zurich. “The pain, anger and shock is felt by everyone who has been disappointed, overwhelmed and affected by the developments over the past few weeks.”
The CEO said he no longer had time to change the course of the bank, although he believed it would be “by the start of this fateful week.” “I’m sorry we couldn’t stop the loss of confidence,” Lehmann said.
Protesters stood outside as his apology reverberated inside the stadium. Some carried the boat “Crisis Suisse”, which represents Credit Suisse’s “sunken ship” 167 years later. There were also rumors of abuse in the purchased bank.
One climate activist, for example, said that Credit Suisse is seeking compensation for the crimes it has allegedly committed. “The Swiss government must take action against the banks to put an end to fossil fuel investments, colonialism and environmental degradation.”
Another climate activist said that the bank blames Credit Suisse for crimes committed in different parts of the world. “Especially in Mozambique, where millions of people have fallen into poverty because of them.”
The activist refers to the aftermath of the Danube Bond incident, a major fraud scandal that emerged in Mozambique around 2013. Members of the ruling party embezzled hundreds of millions of dollars that should have benefited local fisheries.
The country had issued $2.5 billion in government bonds, of which $850 million was raised by investors through international banks and a Dutch company. The million-euro loan was organized by the Russian VTB and Credit Suisse.
When journalists asked who was responsible for the current situation at Credit Suisse, one of them referred to the board and management. “They are white collar criminals and they emptied the company until it was no longer possible. That’s all I can say.”
10 billion euros per day
The takeover of Credit Suisse took place shortly after the collapse of US Silicon Valley Bank and Signature Bank. These events caused great turmoil in the financial markets. But long before the collapse of the American banks, Credit Suisse was grappling with all sorts of problems, mainly due to its own fault.
There were corruption scandals and great losses. At the end of 2022 there was already a small bank run. Confidence was lost when Credit Suisse still streamlined its risk management in March and the main shareholder, the Saudi National Bank, announced that it would no longer support the bank. Customers withdraw about 10 billion euros per day.
After this bank run, the Swiss government turned to UBS, which is also Swiss, for the takeover. He did this for about 3 billion euros.
The merger was led by Dutchman Ralph Hamers. He had to leave the field, but he says he understands: “These are the two big Swiss banks that need to be united for the stability of the Swiss financial world. This is very important for Switzerland.”
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.