April 05, 2023 (MLN): UBS shareholders have expressed concerns over the bank's recent merger with Credit Suisse, with some questioning the decision to take on an institution with a history of financial difficulties.

The merger, which was arranged behind closed doors by the Swiss government, central bank, and financial regulators, was done out of fears of a global banking crisis if Credit Suisse were to fail. However, UBS shareholders are now questioning what the merger means for their personal investments, as UBS takes on an institution that has repeatedly gotten itself into trouble.

At the annual general meeting held in Basel, Switzerland, on Wednesday, UBS shareholders had the opportunity to grill the bank's bosses over the merger.

The meeting saw Dutch CEO Ralph Hamers bow out, with Sergio Ermotti returning as CEO to handle the delicate integration process. UBS Chairman Colm Kelleher voiced concerns about the risks of executing the merger and the potential dangers of "bad culture" from Credit Suisse bleeding into UBS.

UBS will become a banking colossus with $5 trillion of invested assets, but there are concerns about the numerous disputes accumulated by Credit Suisse that UBS will have to settle.

Roger Said, director of the Swiss shareholder organization Actares, stated that Ermotti "will have to put an end to the irresponsible risk culture that has existed for years at Credit Suisse, as well as drastically reduce risky business sectors."

The annual general meeting came the day after Credit Suisse held its final AGM before the 167-year-old bank was swallowed up by UBS. Credit Suisse shareholders, whose investments have plummeted in value, expressed anger and tears at the final meeting.

Credit Suisse Chairman Axel Lehmann stated that he was "truly sorry" that the national institution could not be saved, but ultimately there were only two options: deal or bankruptcy. UBS shares closed up 0.2% on Tuesday, while the Swiss stock exchange dropped 0.2 percent.

The Ethos Foundation, which represents pension funds in Switzerland and owns stakes in both banks, said that Credit Suisse shareholders were mobilizing to get UBS to consider giving them more than 0.76 francs per share. "There are bases being created to potentially go to court to request a review of the exchange ratio," its director Vincent Kaufmann told AFP.

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Posted on: 2023-04-05T11:31:50+05:00