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UBS shareholders express concerns, but broadly support mega-merger

UBS AGM
Top management tried to justify not consulting shareholders on the Credit Suisse takeover. © Keystone / Georgios Kefalas

UBS bank on Wednesday held its first annual general meeting since agreeing last month to take over rival Credit Suisse, with shareholders remaining broadly supportive despite worries over the risks of the mega-merger.

UBS Chair Colm Kelleher admitted there is a “huge amount of risk in integrating these businesses”, but said he was confident UBS could successfully navigate the challenges. Speaking at the meeting in Basel, he said integrating Credit Suisse would take three to four years, not including the wind down of the investment bank.

Outgoing chief executive Ralph Hamers also admitted the challenge but stressed the opportunities the merger presents: a bank with a total of $5,000 billion of assets in wealth and asset management will be created, and UBS will further strengthen its base, he said. The Dutchman is making way for Sergio Ermotti to return to lead the bank for a second time. 

UBS last month agreed to buy its local rival for CHF3 billion ($3.3 billion) in a government-backed deal to avert a Credit Suisse collapse and financial market meltdown. At Wednesday’s meeting, its top management tried to justify the fact that the shareholders had been ignored in the decision to take over Credit Suisse. “We had to act immediately to stabilise the situation,” said Kelleher.

Some UBS shareholders expressed concerns about the risks of the merger, including a concentration of climate risk and the amount of jobs at risk worldwide.

However, the re-election of all the UBS board of directors and the sign-off on the compensation arrangements for senior staff took place with little fanfare or protest, unlike Credit Suisse’s last annual shareholder meeting on Tuesday where a significant proportion of shareholders withheld their support. Credit Suisse shareholders in fact rejected a proposed pay package for managers.

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