UBS investors get their first chance to have their say on the Credit Suisse mega-merger on Wednesday. The deal, which was orchestrated quickly by the Swiss government, the central bank, and financial regulators, was made without UBS shareholders getting a say. This is the first opportunity for UBS shareholders to express their concerns, offering a chance to grill the bank’s management about the merger.
For UBS in particular, this merger has implications for their personal investments due to Credit Suisse’s history of getting into trouble. UBS is absorbing their nearest domestic rival within a matter of months, making this a unique situation indeed. But UBS shareholders can take comfort that experienced leader Sergio Ermotti will be back at the helm, taking on the tricky task of the integration process. Ermotti was called back to UBS to take on the role and was the chief executive between 2011 and 2020, meaning he is well-versed in helping the bank recover from difficult times.
The meeting is being held in the St. Jakobshalle indoor arena in Basel and outgoing CEO, Dutch banker Ralph Hamers, will be attending. The annual general meeting comes the day after Credit Suisse held its final AGM in which the chairman, Axel Lehmann, apologised and was met with emotion from unhappy shareholders whose investments were no longer in the company’s hands.
Upon completion, UBS will become a colossal banking institution with $5 trillion in invested assets. UBS chairman Colm Kelleher has warned of the risks and danger of Credit Suisse’s “bad culture” in their investment banking, calling for a reduction in risky business sectors. This “bad culture” refers also to the disputes accumulated by Credit Suisse, referred to by the director of the Swiss shareowner organisation Actares, Roger Said.
It is Credit Suisse’s top brand ambassador, world famous Swiss tennis great Roger Federer, who will welcome investors to the arena for the meeting. Upon the merger, Credit Suisse shareholders will receive 0.76 Swiss Francs per share- a stark difference to the 12.78 Swiss Francs they had prior to the deal being announced in February 2021.
The Ethos foundation which represents pension funds across Switzerland and have stakes in both UBS and Credit Suisse, are already mobilising to get UBS to provide more francs than promised. UBS shares closed up 0.2% yesterday, whereas the Swiss stock exchange dropped 0.2%.
UBS is a global investment bank, headquartered in Zurich and Basel, Switzerland. Founded in 1862, UBS has become the largest bank in Switzerland and one of the largest banks in the world. The company offers private wealth management, financial services, asset management, as well as a wide array of banking services for its clients.
Sergio Ermotti is the incoming CEO for UBS. He has been called back to the bank in charge of integrating Credit Suisse and spent six years in an executive role at the bank, between 2011 and 2020. Ermotti has a wealth of experience in helping the bank recover from crises, and was brought in to restructure and stabilise the bank in the wake of the 2008 global financial crisis, as well as the losses due to a rogue trader in 2011. He has supervised the set up of UBS’s strategy, which included a focus on cost efficiency, simplification and digitalisation.
