Credit Suisse boss saddened by bank’s collapse fuelled by ‘unfounded rumours’
Chief executive Ulrich Korner said it was a matter of ‘deep personal regret’ that he could not revive the beleaguered lender.
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Your support makes all the difference.The boss of Credit Suisse has expressed his “deep personal regret” over the collapse of the bank that was significantly weakened by “unfounded rumours and speculation”.
Ulrich Korner, the chief executive of the Swiss banking giant which was rescued by rival UBS last month, spoke to staff, clients and shareholders at what is likely to be its final annual general meeting on Tuesday.
The bank’s leaders faced criticism from aggrieved shareholders who saw the value of their shares diminish before the forced takeover.
But Mr Korner said he shared his disappointment that the 167-year-old lender could not be successfully revived before its demise.
The bank had been significantly weakened by the strong outflows in October 2022 as a result of unfounded rumours and speculation
He said: “I understand that you feel disappointed, shocked, or angry. I share the disappointment of you, our shareholders, but I also share the disappointment of all of our employees, our clients and, ultimately, the general public.”
Credit Suisse was in the midst of a turnaround plan which would radically restructure the investment bank and refocus it on the wealth management arm, which Mr Korner said the team had made “good progress” in implementing.
But the transformation was derailed in October when people lost trust in the bank, leading to a wave of customers withdrawing money, he suggested.
“The bank had been significantly weakened by the strong outflows in October 2022 as a result of unfounded rumours and speculation,” Mr Korner said.
“At the same time, for legal reasons, our hands were tied for almost four weeks until the new strategy was communicated on October 27 2022. Only then were we able to address these incorrect statements.”
He also acknowledged that the collapse of Silicon Valley Bank and Signature Bank in the US prompted concerns over the health of the global financial industry at a time when Credit Suisse was “particularly vulnerable”.
Some shareholders, who did not receive a vote on the takeover after the Government passed an emergency order to bypass the step, asked the leadership to explain their actions in the leadup to the merger and questioned its legality.
One shareholder said: “It is not acceptable that people who can drive a bank into the ground do not go to jail. It cannot be that directors and executives who have driven this bank into the ground over the years get to keep their salaries and their bonuses.”
Another said shareholders have had “everything stolen from them”, while one held up a bag of walnuts and said: “A bag of these is worth about one share.”
Protesters gathered outside the Zurich arena hosting the meeting, with some climate activists raising a boat labelled “Crisis Suisse”.
Nevertheless, shareholders voted to approve the bank’s pay packages by the thinnest of margins at the meeting.
Just 50.06% approved the annual compensation report, only fractionally above the 50% needed for it to go through.
Mr Korner took home a pay package totalling 2.5 million Swiss francs (£2.2 million) over 2022, while the highest paid executive board member, former chief financial officer David Mathers, received 3.9 million Swiss francs (£3.4 million).
Meanwhile, chairman Axel P. Lehmann said he was “truly sorry” that he did not have time to put Credit Suisse back on track and rebuild trust in the beleaguered lender.
“We are all committed to this merger and will devote all our energy to create a new, joint, and successful future with UBS together,” he said.