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Credit Suisse shareholders get last crack at annual meeting

GENEVA (AP) — Once-venerable Credit Suisse is heading into a possible firestorm Tuesday as shareholders meet for what is shaping up to be their last crack at managers following a colossal collapse of the bank’s stock price over the last decade and as rival UBS is set to gobble up the 167-year-old Swiss lender at a bargain-basement price.

In 2007, Credit Suisse shares fetched as much nearly 88 Swiss francs (dollars). Today, they’re trading at about 80 cents.

As the stock skid worsened and jittery depositors pulled their money, Swiss government officials hastily orchestrated a $3.25 billion takeover by UBS two weekends ago. Political leaders, financial regulators and the central bank feared a teetering Credit Suisse could further roil global financial markets following the collapse of two U.S. banks.

Crosstown competitor UBS has been known for a more conservative culture after surviving the 2008 financial crisis, thanks in part to a government bailout.

The annual general meeting, the first held in person in four years because of the COVID-19 pandemic, takes place at a Zurich hockey arena where notables like former U.S. President Barack Obama and rapper Post Malone are scheduled to headline later this month.

Credit Suisse’s pared-down agenda will feature discussion of issues like a dividend of about 5 cents per share, the reelection of the board of directors under Chairman Axel Lehmann — who was parachuted into the top board job only last year after joining Credit Suisse from UBS in 2021 — and granting a form of approval to managers for most of their actions running the bank.

Credit Suisse swooned from scandal to scandal in recent years: Bad bets on hedge funds; accusations of violating a U.S. plea deal by failing to report secret offshore accounts held by wealthy Americans to avoid paying taxes; failing to do enough to prevent money laundering by a Bulgarian cocaine ring.

The Swiss federal prosecutor’s office on Monday announced it has opened a probe into events surrounding Credit Suisse ahead of the UBS takeover.

Young Socialists and other demonstrators flocked to Zurich streets after the deal was struck last month, in part to decry the likelihood of job cuts that executives have said are inevitable.

Shareholders, who did not receive a vote on the merger after the government passed an emergency ordinance to bypass the step, could be the ones raising their voices in protest Tuesday.

Some analysts, however, said the meeting may not be as well attended as usual because the takeover isn’t on the agenda.

“Those shareholders who oppose the transaction will be unlikely to waste their time” coming to the meeting, said Octavio Marenzi, CEO of consulting firm Opimas LLC. “They will have to fight this through the courts.”

Under the shotgun union, Credit Suisse shareholders collectively will get 3 billion francs in the combined company, while investors holding about 16 billion francs ($17.3 billion) in higher-risk Credit Suisse bonds were wiped out.

Typically, shareholders face losses before those holding bonds if a bank goes under. Swiss regulators have defended the move, saying contracts for the higher-risk bonds show that they can be written down in a “viability event,” particularly if the government offers extraordinary support.

That happened under the Swiss executive branch’s emergency measures, regulators say.

Global law firm Quinn Emanuel said Monday that bondholders have hired the firm to “represent them in discussions with Swiss authorities and possible litigation to recover losses” following the merger announcement.


AP writer Courtney Bonnell contributed from London.

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