UBS’s chief executive told shareholders on Wednesday that the emergency takeover of beleaguered rival Credit Suisse by the Swiss bank was a risky “very difficult task” but still the right decision. said.
Switzerland’s largest bank took a hit on March 19 with a deal that closed twice as fast over fears of a global banking crisis if beleaguered Credit Suisse went bankrupt. Trying to absorb the rival received.
Shareholders of both banks had no say in the mega-merger, which was carried out behind closed doors by the Swiss government, central bank and financial regulator FINMA.
UBS chairman Colm Kelleher told the bank’s annual general meeting in Basel that the takeover would depend on them but would bring stability.
“While we have not initiated these discussions, we believe the transaction is financially attractive to UBS shareholders and we are confident we have made the right choice,” he claimed.
“Immediate action was required to stabilize the situation and there was no time to consult with shareholders.
“We understand that not all UBS and Credit Suisse stakeholders are happy with this approach.”
UBS will become a giant bank with $5 trillion in investment assets.
– “People are perplexed” –
Kelleher said the deal is expected to close in the coming months and will keep the vital financial sector a pillar of prosperity for the Swiss nation.
However, he warned: “You can’t just add the numbers together to arrive at a total.
Investor confidence plummeted after a series of Credit Suisse scandals led to the collapse of three US regional banks in early March.
UBS vice chairman Lucas Gewiller said the acquisition had sparked “a lot of emotion around the world”.
“I can understand why people are confused and angry,” he told shareholders.
“Both banks will have to continue and consolidate over the next few years, which is actually a very difficult task.”
UBS shareholders want to know exactly what their relationship with Credit Suisse is, according to Ethos Foundation, which represents Swiss pension funds and holds shares in both banks.
“We are buying banks without doing due diligence,” the head of the bank, Vincent Kaufmann, told AFP.
“As a UBS shareholder, I don’t know what’s in my closet.”
– CEO Hamers bids farewell –
In all, 1,128 UBS shareholders attended the AGM at Basel’s St. Jakobshalle Indoor Arena. This arena is famous as the stepping stone for the great Swiss tennis player Roger Federer, his ambassador for the top of his brand at Credit Suisse.
The meeting saw Dutch CEO Ralph Hammers step down and Sergio Ermotti returning as CEO.
Ermotti ran UBS from 2011 to 2020 and was hired to restructure and stabilize the bank after the state bailed it out during the 2008 global financial crisis.
UBS chairman Colm Kelleher said he felt Swiss bankers would be “better pilots” for the bank’s new flight path.
“March 19 was a shock to all of us,” Hammers said.
“UBS can be proud to be in such a strong position otherwise a quick resolution to rescue Credit Suisse would not have been possible.”
Kelleher has previously expressed concern about the dangers of Credit Suisse’s “bad culture”, primarily in its investment banking business, at UBS.
At a press conference in Zurich, regulator FINMA chief executive Urban Angehrn said the motivations for the merger to work were very strong at both banks, but cautioned.
“These banks have a very different culture today. It’s a very difficult task that will take a few more years,” he said.
UBS’s annual general meeting will be held the day after Credit Suisse held its final annual shareholders’ meeting.
Credit Suisse chairman Axel Lehmann said he was “really sorry” for not being able to save the 167-year-old bank.
Their investment value plummeted from CHF 12.78 per share in February 2021 to CHF 0.76 they will receive in the $3.25 billion merger.
https://www.theaustralian.com.au/news/latest-news/ubs-shareholders-to-weigh-in-on-credit-suisse-megamerger/news-story/005fbb23f3a3c25989353b116b041c23 UBS says the Credit Suisse merger is the right move despite the risks.