TheChek News Flow

Curbs to total over 1 million barrels of oil a day, with much of the sum coming from Saudi Arabia

Some members of the Organization of the Petroleum Exporting Countries and its Russia-led allies agreed to cut more than 1 million barrels a day until the end of the year tied to concerns over the stability of financial markets, said Saudi state media and OPEC delegates.

Much of the new reductions are coming from Saudi Arabia, state media said. The cut includes extending 500,000 barrels a day of voluntary reductions from Russia, OPEC’s biggest ally. The decision would add new curbs to a cut of 2 million barrels a day agreed to in October.

The cuts announced in October ratcheted up tensions with the Biden administration, which had hoped the group of petrostates would increase production and help tame rising inflation, driven in part by high energy prices. At the time, the White House accused the 23-member group collectively known as OPEC+ of actively supporting Russian President Vladimir Putin.

The move is likely to push up global energy prices and help oil-exporting Russia pay for its war in Ukraine. Moscow has been hit by bans on its oil exports to Europe and price caps after the invasion.

The latest cut comes as oil prices have tamed somewhat since highs of $100 a barrel last summer. Oil prices have risen close to $80 a barrel after a dispute over Iraqi Kurdish exports disrupted about 500,000 barrels a day of Iraqi exports.

The energy ministry of Saudi Arabia, which would cut 500,000 barrels a day, said in a written statement that its voluntary reduction was a precautionary measure aimed at boosting the stability of the oil markets.

Iraq, which is OPEC’s second-largest oil producer, would reduce its output by 211,000 barrels a day, its oil ministry said.

Saudi Arabia in particular is concerned about the vulnerability of the banking sector. A $1.5 billion Saudi investment in Credit Suisse Group AG was almost wiped out after Credit Suisse’s merger with UBS Group AG .

Investigation will examine leaks and potential breaches of criminal law by officials, regulators and bank executives

Switzerland’s Federal Prosecutor has opened an investigation into the state-backed takeover of Credit Suisse by its larger rival UBS.

The Bern-based prosecutor is looking into potential breaches of Swiss criminal law by government officials, regulators and executives at the two banks, which agreed an emergency merger last month over the course of a frantic weekend in order to avert a potentially catastrophic financial crisis.

A focus of the probe concerns sensitive information from the negotiations that was leaked to the press, said a person familiar with the investigation, which could constitute a breach of state secrecy or industrial espionage laws. 

“The Federal Prosecutor’s office wants to proactively fulfil its mission and responsibility to contribute to a clean Swiss financial centre and has set up monitoring in order to take immediate action in any situation that falls within its field of activity,” the authority told the Financial Times.

There were “numerous aspects of events around Credit Suisse” that warranted investigation, it said, which needed to be analysed to “identify any crimes that could fall within the competence of the [prosecutor]”.

The prosecutor, Stefan Blättler, has issued a number of “investigatory orders” to government bodies. His office has also been in contact with the federal and cantonal governments and is likely to seek to interview key officials in relation to the takeover.

The forced marriage of the two banks has caused outcry in Switzerland: political parties have triggered a special sitting of parliament this month in which a formal commission of inquiry is likely to be voted into power.

Polling shows that more than three-quarters of Swiss citizens are opposed to the $3.25bn takeover, which will create a financial behemoth with more than SFr5tn ($5.5tn) of assets under management.

A majority support legislation to split up the bank or even measures to claw back bonuses from senior staff, who they say should be held responsible for their actions.

Parliamentarians from across the political spectrum have also questioned the use of emergency powers by the government — the seven-person Federal Council — to extend taxpayer-backed financial guarantees to UBS and to silence possible shareholder opposition.

The Federal Council issued an ordinance to wipe out more than SFr16bn of so-called AT1 subordinated hybrid debt instruments issued by Credit Suisse in order to smooth the takeover, while choosing to preserve some value for equity holders.

The measure angered some large international fixed-income investors, and caused concern among international regulators over its impact on other banks’ ongoing ability to raise capital.

Some of the investors affected have pledged to take the Swiss government and financial regulator to court over the decision.

Bern has insisted the urgency of the situation last month left it with few options. Credit Suisse experienced a dramatic deterioration in its ability to access liquidity in the days before the rescue was finalised, on March 19, the government has said.

According to finance minister Karin Keller-Sutter, a state takeover of Credit Suisse, or its orderly break-up in a process known as “resolution” were not viable alternatives to the takeover owing to the unacceptable financial risks to taxpayers they would have incurred.

Shareholders for both UBS and Credit Suisse — who were denied a say by the government fiat — will next week have an opportunity to air grievances at both banks’ annual meetings.

Credit Suisse and UBS declined to comment.

GENEVA - Demand for luxury watches is cooling down after the post-Covid boom of 2022, executives said at trade fairs in Geneva this week. Swiss watch exports may continue to rise but the reality is that distributors’ stock is growing and many retailers have become reticent to commit to major orders, they said.

The U.S. market, the biggest for many major watchmakers, is a top concern. Rising interest rates are holding back discretionary spending. U.S. consumers have a culture of revolving credit – they buy with their credit card and pay bills later. Rising interest rates mean that for upper and middle classes, luxury products such as watches, jewelry or handbags have become more expensive. On top of weakness in the U.S. market, demand in China is not recovering as fast as analysts expected and social unrest in France is likely to keep tourists away for the foreseeable future.

Hence, the global picture is far from rosy even though the Federation of the Swiss Watch Industry said last month that watch exports had risen year-on-year by 12.2 percent in February, against 8.6 percent in January.

“Due to rising interest rates, after record growth in 2022, we are experiencing a temporary slowdown in discretionary spending in the United States,” Bulgari CEO Jean-Christophe Babin told Miss Tweed in an interview in Geneva, where the brand presented its latest watch collections. The U.S. is Bulgari’s third-biggest market after China and Japan. “The U.S. remain a territory of opportunity for luxury, but this market is now growing less than others.”

Babin, who just came back from China, said that market was recovering quickly but had not reached 2021 record levels in terms of traffic. With the recent reopening of Hong Kong and Macao, many shoppers have returned. However, traffic in malls and boutiques there and elsewhere in China is around 10 to 20 percent below what it was in 2021, said the executive, who has dual French and Italian nationality.” But if there are fewer visitors, those who come, spend more than two years ago.

“Those people who visit malls come more to spend money than to walk around,” Babin said. “As a result, we make more revenue in 2023 with fewer clients versus 2021.” He pointed to the fact that there were visa emission and flight capacity constraints that prevented Chinese tourists from leaving the country and shopping abroad. He expected them to start traveling overseas again in May or June.

Overall, after a record year in 2022, Babin said he expected Bulgari to enjoy solid growth this year, helped in part by local clients in Europe or Japan with which the brand has built strong relations in recent years. Another growth market is Saudi Arabia, which executives say is becoming the new Dubai of the Middle East in terms of the gravity center for luxury sales. Many luxury brands, including Bulgari, have created a subsidiary and are opening boutiques there.

Bertrand Savary, CEO of the Arnold & Son and Angelus watch brands, part of the Japanese group Citizen, said Saudi Arabia was one of his top priorities in terms of investment. “The population in Saudi Arabia is young and affluent,” Savary said on the fringes of the Watches & Wonders fair in Geneva. “The country is opening up and allowing joint ventures with foreign companies and offering attractive conditions for investors.”

Savary said he also planned to work on the European market and develop relationships with retailers and local customers. China is also on his top list of priorities in terms of market expansion. However, he said was concerned about the current social unrest in France. “When people see on television that Paris is burning, this frightens tourists,” he said. Savary also shared Babin’s worries about the U.S. market. “For me, there is a lot of concern about how the U.S. market is going to behave in the next few months,” he said. Like him, he predicted that China would not recover fully for a while. Taking all these factors into account, Savary said he planned to increase production this year by 20 percent against 45 percent last year. “We are going to be prudent this year in terms of production.”

Julien Tornare, CEO of Zenith which is part of LVMH like Bulgari, is one of many executives who say the post-Covid euphoria is fizzling out. “I think we are going to come back to a phase of normality after the post-Covid boom,” Tornare told Miss Tweed. But for Zenith, Tornare was quite optimistic about its growth prospects for 2023 after having enjoyed buoyant trading in the past three years. “We continue to enjoy strong growth. We don’t see any negative indicators at this time. Order books are full. Globally, we are not particularly exposed to any major turbulences.” Regarding the ongoing turmoil in France that could scare off tourists, he said: “In Europe, we have learned how to do business without tourists. So, even if there are fewer tourists this year, it’s not that bad.”

DIFFICULT YEAR AHEAD

Wholesalers are bracing themselves for a more difficult year. “There has been a paradigm change,” explained Maximilian Busser, CEO of MB&F, an independent watch brand that has won many prizes for its creativity and innovation. “Retailers are being much more cautious than last year. “Many big distributors told me that their total inventory had doubled since the beginning of the year. They are bracing themselves for a sharp slowdown,” Busser said.

However, there was some good news. If customers were frustrated when they couldn’t buy the watch they wantedlast year, replenished stocks this year mean they should now be able to buy the watch of their dreams. If last year, they bought whatever time pieces were available, this year they are likely to prefer to wait to get the model they want, he said. “On brands that have big volumes, customers are going to be able to leave the boutique with a watch,” Busser said. “But customers are no longer ready to buy whichever watch is available. They want the watch for which they came.”

Busser said MB&F was increasingly approached by distributors keen to sell the brand’s watches. However, since production is limited, he preferred to stick with those distributors that believed in MB&F from the beginning. This year, Busser said he expected to produce 420 watches against 345 in 2022. Demand for his brand is so strong that distributors have waiting lists of many years, he said.

SECOND HAND

The price of watches on the second-hand market dictates a brand’s desirability. One of the main worries for watch buyers is that the price of very popular models for hot brands such as Rolex, Patek Philippe and Audemars Piguet has been steadily falling since last year. The good news is that those who bought watches to speculate on their value in the second-hand market and were behind last year’s bubble are progressively disappearing from the market, industry players said.

Arjen Van De Vall, CEO of Richemont’s second-hand retailer Watchfinder, said it was difficult to predict what was going to happen in terms of price trends in second-hand time pieces. “If we talk purely about watches for which there was a lot of speculation, there is a risk that there could be a further decline in prices. But there could also be a further spike,” Van De Vall told Miss Tweed on the fringes of the Watches & Wonders trade fair.

“What we are seeing in the last few weeks is that collectors are getting back into the market,” he said. “Many people are still testing the waters. We see a lot more interest than six months ago for very high-end pieces, watches costing more than €30,000 on the second-hand market,” he noted. “What we see now is that there is more availability of pieces that were more difficult to secure six to nine months ago. Many flippers have left the market. Some of them made a lot of money but some of them also got burned,” he explained.

WHOLESALERS

In the past few years, many major watch groups and brands have cut down the number of wholesalers they work with. They prefer selling their products in their own boutiques. This allows them to control image, prices and stock. Also, they pocket the margin they were previously giving wholesalers.

Audemars Piguet, one of the market’s most popular brands, has been reducing its network of wholesalers for more than a decade and mainly relies on its own network of monobrand boutique. Same for Richard Mille. Patek Philippe, which for decades relied solely on third-party distributors, announced that it would cut the number of authorized dealers by 30 percent. This means that Patek Philippe is going to open boutiques. Rival Richemont, owner of Cartier, Van Cleef & Arpels and several watch brands, is also downsizing its network of wholesalers. In Paris, the Swiss group Bucherer, one the city’s most important watch retailers, closed down the accounts of several of its brands including Panerai, IWC and Jaeger-LeCoultre. Last year, Bucherer had already stopped selling Richemont’s Vacheron Constantin and Lange & Söhne.

One senior source close to Bucherer in Paris said the retailer told Richemont recently: “You cannot pick and choose like in a menu. Either Bucherer in Paris works with all of Richemont’s brands or Richemont takes all of its brands back.” The senior source added: “The idea was to send a warning to Richemont that they cannot behave like that. It is a matter of principle. You cannot say I am going to open boutiques for those brands that are doing well and I leave you those brands that are not doing particularly well.”

As wholesalers lose business with big brands, they are on the lookout for new names and concepts. Some independent brands that were struggling to find distributors one or two years ago say it has become much easier to find retail partners. “If three years ago, many watch dealers would tell us that they are not taking on any new brands, today they have become much more forthcoming,” Robert Punkenhofer, CEO of the minimalist Viennese watch brand Carl Suchy & Söhne founded in 2018. One of its investors is Peter Brabeck-Letmathe, the former chairman and CEO of Nestlé. Today, the brand works with 10 retailers including Chrono Passion in Paris.

Former banker François Moreau is the founder of Reservoir, a watch brand launched in 2017 that features both a retrograde minute hand and jumping hour indicator. It looks like an RPM gauge or speedometer, and is coupled with a power reserve function that indicates how much autonomy the automatic time pieces have. Many Reservoir watches are inspired by vintage cars’ dashboards like that ofPorsche 356 Speedster from the 1950s. Some also feature cartoons like Popeye. “Yes, it’s true that it has become easier to find distributors but they are mainly interested in brands that stand out from others,” Moreau told Miss Tweed.

Reservoir, alongside 50 other brands, took part in the Time to Watches fair at Geneva’s HEAD fashion and design school. It ran in parallel to the Watches & Wonders fair at Palexpo out near the city’s airport. Miss Tweed was not given access to the Watches & Wonders fair, even though it had received an email that confirmed it was registered. The organizers of the fair did not give any warning about the fact that the media was no longer accredited. The explanation, provided by the brands that had invited Miss Tweed to the fair, was that Richemont had blacklisted the Paris-based media. The same thing happened in 2022. Plus ça change, plus c’est la même chose.

Norwegian owner of UK Seabed Resources says backing from Europe needed in the face of Chinese dominance

Europe must be prepared to support deep-sea mining if it is to secure metals crucial to making the transition to clean energy, the new Norwegian owner of British industry hopeful UK Seabed Resources has warned.

Hans Olav Hide, chair of Norway’s Loke Marine Minerals, said the controversial practice could help the UK and EU compete in the face of China’s dominance of battery metal supply chains.

“Marine minerals are a very clear response to the geopolitical scene,” Hide said, referring to western governments’ focus on energy security since Russia’s invasion of Ukraine. “People are realising we need to get away from . . . China covering everything.”

“If you build a battery factory you will get funding” from governments, he told the Financial Times. “But if you ask where it will get minerals from, it will be from China or Russia.”

Advocates of deep sea mining say it could play a crucial role in meeting the huge increase in demand for energy transition metals at a time when land-based projects face lengthy waits to gain permits and growing opposition from local communities.

Critics, however, warn the practice poses a serious threat to marine ecosystems and biodiversity, with potentially far-reaching implications.

Global rules to allow deep-sea mining have yet to be approved but companies in various jurisdictions have obtained exploration licences from the UN-backed International Seabed Authority.

The ISA this week debated whether to give the green light to the extraction of manganese, nickel, copper and cobalt from potato-sized nodules up to 5,000 metres beneath the ocean surface.

Hide’s appeal for Europe to secure minerals from the seabed comes days after the EU released the Critical Raw Materials Act aimed at bolstering the bloc’s security of supply.

Demand for commodities such as copper, lithium and rare earths are set to boom because of their use in vital technologies and infrastructure to decarbonise the global economy such as electric cars, renewable power and upgrades to the grid.

The EU has warned for years that the bloc’s reliance on imports of critical raw materials could expose it to supply squeezes from China and threaten its goal to reach net zero emissions by 2050. Most of the world’s cobalt is refined in China, as are all of the rare earths used in magnet production for electric vehicles and wind turbines, it said last month.

Mining companies must obtain the backing of ISA member states in order to obtain exploration licences. The UK, France, India, Russia and China are among countries that have given such backing.

Loke, based in Norway’s oil capital Stavanger, is backed by companies including Norwegian defence contractor Kongsberg Grupper, UK offshore engineer Technip FMC and Norwegian shipping group Wilhelmsen.

It bought UK Seabed Resources from US defence group Lockheed Martin in March for an undisclosed sum. UKSR’s assets include two licences in the Pacific Ocean’s Clarion-Clipperton Zone, the largest known deposit of battery metals.

Loke plans to make an investment decision on mining in the Pacific in 2027 but faces an uphill battle to build a supply chain and client base if it goes ahead.

Commodities group Glencore and Danish shipping company Maersk have both invested in The Metals Company, a Canadian start-up with exploration licences in the CCZ. But big potential consumers including Tesla and BMW have said they will not touch metals mined from the sea because of environmental concerns.

Nick Popovic, co-head of copper and zinc trading at Glencore, told the FT Commodity Summit last month that even when environmental concerns were put aside, economic uncertainties over deep-sea mining made it a difficult investment proposition.

“The problem with deep-sea mining is that it’s so early in the game that without any meaningful examples, I would personally struggle to assess it,” he said.

Without homegrown supply of key battery component, Europe could struggle to compete with China

Europe’s transition to electric cars is under threat because of persisting shortages of lithium, the key battery component that will power the vehicles of the future.

EU plans to ban sales of new petrol and diesel cars by 2035 mean demand for lithium is set to surge fivefold by 2030 to 550,000 tonnes per year — more than double the 200,000 tonnes the region will be able to produce, according to Benchmark Mineral Intelligence.

“The whole global market is still set to be in a deficit by the end of the decade,” said Daisy Jennings-Gray, analyst at Benchmark Mineral Intelligence.

“Europe will probably sit in a tight position in terms of availability and cannot afford any delays to domestic projects [to extract the metal].”

The supply problem has been highlighted by the world’s largest lithium producer Albemarle, which has sidelined plans to extract lithium in Europe after failing to find a commercially viable site.

“The resources we are aware of in Europe are not high quality and relatively small,” the group’s chief financial officer Scott Tozier told the Financial Times.

The projected lithium deficit in a market already suffering global shortages and high prices of $62,000 per tonne — more than five times the average cost of production despite a recent drop — may prove existential for European carmakers.

Without a homegrown supply of the battery gold, Europe’s auto groups could find it difficult to compete with China, which is rapidly expanding its electric car industry and making inroads into the European market.

A sign of China’s dominance in the field is that it controls 60 per cent of global lithium processing, which turns a concentrate produced from brine or ore into lithium chemical compounds such as carbonate or hydroxide that are used in car batteries.

Francis Wedin, chief executive of Australian-listed Vulcan Energy Resources, one of the few companies trying to extract lithium in Europe, said the region’s car industry would not be able to electrify its future fleet without its own lithium.

China “will prioritise supply for its own industry”, he said. Without its own access to lithium, European carmakers would “not survive competition” from the country, he added.

Although US-based Albemarle, which supplies a fifth of the world’s lithium, plans to build a European refinery for the metal by the end of the decade, carmakers need alternatives now.

That has prompted some leading European car groups to gamble on a handful of local projects, where success is far from assured because of the complicated extraction processes.

One involves Perth-based Vulcan, which is promising to extract lithium out of German brine using geothermal power.

Opel-maker Stellantis last year became the first carmaker to invest in a lithium miner when it paid €50mn in return for equity in Vulcan. Renault and Volkswagen have, much like Stellantis, also made binding orders for Vulcan’s expected supply of lithium.

Another risky project involves French mining group Imerys, which aims to extract lithium from rocks underneath a kaolin mine, opened by the country’s ceramics industry in the 19th century.

Vulcan hopes to produce 24,000 tonnes annually two years after starting production in 2025 while Imerys is planning to start producing 34,000 tonnes of battery-grade lithium chemicals a year from 2028.

Combined, this is enough to supply roughly 1.2mn small electric vehicle batteries a year, according to the companies’ calculations.

But this is a long way short of expected demand for electric cars, which is likely to match or exceed current sales volumes with 11.3mn new cars registered in Europe in 2022, according to German trade group VDA.

This also assumes the success of the Vulcan and Imerys ventures.

“The projects carry an inherent risk as we are daring production processes that nobody has done before,” admitted Alessandro Dazza, chief executive of Imerys, as he highlighted the need for government support.

In addition, there is a danger the ventures will end up costing far more than rival projects.

Vulcan needs to put down nearly twice as much money upfront than many of its rivals, as it must build geothermal plants before it can start the extraction process.

Its method involves pumping up hot lithium-rich brines from underground wells. The heat from the brine creates geothermal energy that can be used to extract the lithium, as well as heat nearby communities, reducing its carbon footprint.

Its capital expenditure exceeds $30,000 per tonne of production capacity compared with an average of $17,300 for just over 50 of the world’s leading lithium projects, according to S&P Global and Scotiabank.

Analysts at S&P say the higher cost for some projects is because they involve on-site processing of the material to the high grade needed for batteries, which Vulcan hopes to do.

Vulcan also argues that its production costs, once the plant is built, will be unusually low with operational expenses estimated at €4,000-€4,500 per tonne.

That claim, however, has been met with some investor scepticism. Nearly 7 per cent of Vulcan’s shares on the Australian Securities Exchange have been shorted — a bet on the share price falling.

The company has also pushed back the timeline for its first production by a year to 2025, which is not an uncommon fate with the average lithium project being delayed by three years against original expectations, according to Canaccord Genuity.

The EU is aware of the problems. Its Critical Raw Materials Act aims to shore up its EV supply chain by sourcing more battery metals such as lithium, cobalt and nickel domestically.

But executives say financial support from governments is needed to get domestic lithium supply off the ground.

Europe also needs to address bureaucratic hurdles, such as arduous procedures for processing permits, as well as political and local resistance to mining.

It can take years for some mining companies to get their environmental permits once all the studies have been submitted. The EU wants to impose a 24-month deadline to address this.

Rio Tinto’s Jadar project in Serbia, which would have created one of the world’s largest lithium mines, was one of the casualties of the system. Its exploration and development licences were revoked ahead of elections last year because of environmental concerns and political opposition.

But even without permitting delays, analysts say the challenges ahead for Europe in meeting lithium needs are enormous, particularly when compared with the US that has put vast resources behind disentangling its critical mineral supply chains from China.

“It’s a one-two punch for the extractive sector in Europe of a lack of money going in at the early stage of exploration and a much more difficult permitting environment than Africa, Australia and Canada,” said Kevin Murphy, analyst at S&P Global Commodities.

“In the near term, Europe will be heavily reliant on outside resources to supply their industry.”

Credit Suisse braced for backlash over UBS rescue at shareholder meeting

First in-person AGM for four years will be the bank’s last as an independent company following takeover

Credit Suisse is bracing for a tumultuous annual shareholder meeting on Tuesday, when protesters are expected to vent their anger at the implosion of one of Switzerland’s historic financial institutions.

The meeting will take place at a 15,000-capacity ice hockey stadium in the Zurich suburb of Oerlikon. It will be the bank’s first in-person AGM for four years and its last as an independent company after 167 years at the centre of the Swiss economy.

The board is expected to bear the brunt of investors’ anger over the bank’s rescue two weeks ago by its rival UBS. Shareholders of both banks were denied a vote on the $3.25bn takeover thanks to emergency measures taken by the Swiss government to rush the deal through.

There is fear among Credit Suisse executives that the event could attract more vehement protests from Swiss citizens, who are outraged by the bank’s rapid decline and litany of recent scandals.

More than three-quarters of Swiss voters want the combined mega bank to be split up by new legislation, according to opinion polls.

Credit Suisse withdrew two votes from its AGM agenda last week, saying they were no longer necessary because of the takeover. The first was a vote on whether members of the board should be absolved of legal responsibility for the 2022 financial year. The second was on whether executives should receive a special SFr30.1mn bonus for completing the five-year restructuring that started last year.

Proxy advisers ISS, Glass Lewis and Ethos Foundation had recommended shareholders vote against the so-called “discharge” vote, which is common in Swiss AGMs, as well as the bonus.

The Norwegian sovereign wealth fund, which is a top 10 independent shareholder in the bank, announced on Friday that in addition to voting against discharging the board and for the special bonus, it would also vote against the majority of directors.

Norges Bank Investment Management said it would vote against chair Axel Lehmann, along with longstanding directors Iris Bohnet, Christian Gellerstad, Shan Li, Seraina Macia, Richard Meddings and Ana Pessora.

“Shareholders should have the right to seek changes to the board when it does not act in their best interest,” Norges said.

“We will . . . take into consideration unsatisfactory financial and strategic performance, mismanaged risk-taking, unacceptable treatment of stakeholders or undesired environmental or social outcomes from company operations.”

Glass Lewis had recommended shareholders vote against Lehmann due to the lack of information the board provided over conflicts of interest regarding an agreement Credit Suisse had in place to transfer much of the investment bank to former director Michael Klein.

The proxy adviser also raised conflict of interest concerns surrounding director Blythe Masters, who acted as an adviser to Apollo Global Management while Credit Suisse was negotiating with the US private equity group over the sale of its securitised products business.

Glass Lewis recommended shareholders vote against board member Mirko Bianchi for his role as chair of the audit committee after flaws were identified in the bank’s internal controls.

Only registered shareholders and members of the media will be able to attend the meeting. Attendees will have to show identification and pass through security.

Lehmann and chief executive Ulrich Körner will address the audience and then invite questions from the floor, a process that is expected to take several hours as shareholders vent their frustration.

UBS’s own AGM, which will take place on Wednesday at the 12,400-seater St Jakobshalle arena in Basel, is expected to be a less raucous affair.

Proxy advisers have not recommended investors vote against meaningful parts of UBS’s meeting agenda and shareholders have so far been comfortable with the potential upside of the Credit Suisse takeover, despite being denied a say on it.

UBS shares have risen more than 10 per cent since the deal was announced.