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UBS chiefs told shareholders on Wednesday that the Swiss bank's emergency takeover of beleaguered rival Credit Suisse was a "Herculean task" strewn with risks, but still the right decision.
Switzerland's biggest bank is absorbing its stricken rival in a deal stitched together in double-quick time on March 19 out of fears of a global banking crisis if the floundering Credit Suisse went under.
Shareholders of both banks had no say in the mega-merger, which was engineered behind closed doors by the Swiss government, the central bank and the financial regulators FINMA.
UBS chairman Colm Kelleher told the bank's annual general meeting in Basel that although the takeover was sprung upon them, it would offer stability.
"Whilst we did not initiate these discussions, we believe that this transaction is financially attractive for UBS shareholders. I am convinced we made the right choice," he insisted.
"Stabilising the situation required urgent action, leaving no time to consult shareholders.
"I understand that not all stakeholders of UBS and Credit Suisse are pleased with this approach."
UBS will become a banking colossus, with $5 trillion of invested assets.
Kelleher said the deal was expected to close within a few months and would preserve the critical financial sector as a pillar of Swiss national prosperity.
But he warned: "You cannot just put numbers together and reach a sum. You have to understand that there is a huge amount of risk in integrating these businesses."
A series of scandals at Credit Suisse saw investor confidence plummet after three US regional banks collapsed in early March.
UBS vice-chairman Lukas Gaehwiler said the takeover had triggered "many emotions worldwide".
"I can understand why people are bewildered, even angry," he told shareholders.
"Both banks have to be continued and integrated in the coming years. This actually is a Herculean task."
The Ethos foundation, which represents pension funds in Switzerland and owns stakes in both banks, said UBS shareholders wanted to know precisely what they were taking on with Credit Suisse, which repeatedly got itself into trouble.
"You are buying a bank without doing due diligence," its director Vincent Kaufmann told AFP.
"As UBS shareholders, we don't know what's in the closets."
In all, 1,128 UBS shareholders attended the AGM in Basel's St. Jakobshalle indoor arena, famously the stomping ground of Swiss tennis great Roger Federer -- Credit Suisse's top brand ambassador.
The meeting saw Dutch chief executive Ralph Hamers bow out, with Sergio Ermotti returning as CEO.
Ermotti ran UBS between 2011 and 2020, having been brought in to restructure and stabilise the bank after its state bailout during the 2008 global financial crisis.
UBS chairman Colm Kelleher said he felt the Swiss banker would be the "better pilot" for the bank's new flight path.
"March 19 was a shock for all of us," said Hamers.
"We can all be proud that UBS is so strongly positioned, otherwise a quick solution for Credit Suisse's rescue would not have been possible."
Kelleher has previously voiced his concerns about the dangers of "bad culture" from Credit Suisse, primarily in its investment banking, bleeding into UBS.
At a press conference in Zurich, Urban Angehrn, the chief executive of regulators FINMA, said the motivation to make the merger work was extremely strong at both banks, but also sounded a note of caution.
"Today these banks have very different cultures. That is the Herculean task that will take a few more years," he said.
The UBS annual general meeting comes the day after Credit Suisse held its final AGM.
Credit Suisse chairman Axel Lehmann said he was "truly sorry" that the 167-year-old bank could not be saved as he faced angry and tearful shareholders whose money has gone up in smoke.
The value of their investment has plunged from 12.78 Swiss francs per share in February 2021 to the 0.76 francs they will receive in the $3.25-billion merger.
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