Credit Suisse hasn’t cornered the market on investor angst, it appears, from a Wednesday shareholder meeting for the bank’s acquirer, UBS.

“I can understand why people are bewildered, even angry,” said Lukas Gähwiler, UBS’s vice chair, according to the Financial Times. “We had only 48 hours to conduct our due diligence, so many questions thus remain unanswered. ... This is a Herculean task.”

The government-backed takeover of Credit Suisse by UBS was hammered out over a Friday-to-Sunday time frame two weeks ago, but UBS had studied the feasibility of acquiring its rival as early as 2020, Bloomberg reported.

The integration of the two banks is expected to take roughly three to four years, excluding Credit Suisse's non-core investment bank portfolio, executives said, according to CNBC.

“You cannot just put numbers together and reach a sum — you have to understand there is a huge amount of risk in integrating these businesses,” UBS Chair Colm Kelleher said Wednesday, according to the Financial Times. “This is not in any way an easy deal to do.”

The tie-up is set to ultimately push UBS past $5 trillion in assets under management.

“The task of integrating CS will be huge, even if plans existed prior to the latest events,” Barbara Casu, a professor of banking and finance at Bayes Business School, told Bloomberg. 

Kelleher has called March 19 — the day the merger was announced — a "historic day and a day we hoped would never come,” according to CNBC.

But it may serve as a case study in the value of patience. UBS, in January 2022, agreed to spend $1.4 billion to acquire robo-adviser Wealthfront — a business with $27 billion in assets under management. (The deal later imploded.) Fast-forward a year, and the $3.25 billion UBS is paying for Credit Suisse will give it more than 50 times the client assets, Bloomberg reported.

Meanwhile, Credit Suisse shareholders will receive 1 UBS share for every 22.48 Credit Suisse shares they held.

Shareholder concerns 

Still, not everyone was pleased. At least one adviser, Ethos Foundation, attended the UBS meeting Wednesday after going to Credit Suisse’s a day earlier.

Vincent Kaufmann, Ethos’s CEO, said the deal will mean half of all mortgages in Geneva will be held by one bank. “There is a huge concentration of risk in the Swiss market,” he said, according to the Financial Times.

Nicolas Götschmann, of the proxy adviser Actares, sought assurances that UBS would quickly scale back risky investment-banking activities by Credit Suisse that he said his company had “warned about for years.”

Meanwhile, Jeanne Martin, head of banking at Share Action, warned that taking on Credit Suisse’s balance sheet will worsen UBS’s comparatively weak climate strategies, according to Bloomberg.

Kelleher acknowledged that UBS shareholders won’t be able to vote on the acquisition, adding there was “no time” to consult them as the deal developed, Bloomberg reported. 

“I understand that not all stakeholders of UBS and Credit Suisse are pleased with this approach,” Kelleher said. “However, all parties, and in particular the Swiss authorities, considered this solution the best of all available options.”

Finma’s considerations

In a separate press conference Wednesday, Urban Angehrn, the CEO of Switzerland’s banking regulator Finma, said it initially considered putting Credit Suisse into bankruptcy. The regulator de-emphasized that option, however, because of the “drastic impact” it would have had, Angehrn said. 

Finma also considered a temporary nationalization — a prospect it “rejected on risk and legal grounds and out of a preference for a private sector solution,” Angehrn said, according to Bloomberg. 

A takeover was the best option, he said, for the “considerable confidence” it would give the marketplace. 

Finma President Marlene Amstad rejected the suggestion that the regulator didn’t intervene on Credit Suisse early or aggressively enough. The regulator initiated six public enforcement proceedings against the bank in recent years, she said, and demanded higher liquidity buffers as early as 2020.

Wednesday marked a passing of the torch, too, at UBS’s meeting, as the bank’s former CEO, Sergio Ermotti, regained that title and Ralph Hamers stepped down.

“When I look back upon my arrival at UBS in 2020, I saw no reason to rebuild everything,” Hamers said, according to Bloomberg. “There was no need for restructuring, but for transformation.”

UBS’s board of directors saw re-election with little pushback, a contrast to voting at Credit Suisse on Tuesday. Kelleher, for instance, received nearly 90% approval, according to Reuters. 

Shareholders signed off, too, on compensation plans for senior staff — albeit with a warning.

“We need to radically change the culture of bonuses,” said Martin Schütz, according to the Financial Times. “Otherwise, we will be waking up one day with UBS having gone down the drain as well.”