Credit Suisse raises more than £3bn to plug capital hole
Bank announces plan in quarterly results ahead of extraordinary general meeting on 18 May
Credit Suisse has announced it is raising more than £3bn to bolster its capital reserves without selling off its core Swiss retail banking operations.
Announcing its quarterly results yesterday, the group said it will raise SFr 4bn (£3.1bn) from existing shareholders.
The bank already raised SFr 6bn (£4.7bn) from investors in 2015, says the BBC, when it also announced a restructuring that would have seen it reduce its stake in its domestic banking business through a stock market listing.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
However, bosses abandoned that plan this February and said they would seek to raise between SFr 2bn (£1.57bn) and SFr 4bn from investors to plug a capital gap identified by regulators.
The bank had not been expected to announce anything on the capital raising in its quarterly results,
As the issue is "not on the agenda for the shareholding meeting on Friday", the capital raising was not expected to be mentioned yesterday, says the Financial Times.
But, it adds, "Credit Suisse detailed plans for an extraordinary general meeting on 18 May so shareholders can vote on the sale of SFr 4bn of new stock to existing investors at an implied discount of 29 per cent to Tuesday's closing price".
It is also seeking to reduce costs, including through cutting 5,500 jobs.
The bank says the new capital boost will increase its core tier one equity ratio - the main regulatory measure of capital reserves to be drawn in the event of a crisis - to 13.4 per cent, which is "in line with European peers".
However, Bernstein analyst Chirantan Barua said: "The capital raise should be enough to allay concerns in the near term, but doesn't really give the franchise the flexibility to see it through a downturn or meaningfully compete in global markets.
"We feel this raise doesn't really take capital totally out of the concern zone."
Credit Suisse's results showed a first-quarter profit of SFr 596m (£468m), up from SFr 302m (£237m) a year ago. Its share price rose 2.5 per cent in early trading.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
4 ways to give back this holiday season
The Explainer If your budget is feeling squeezed, remember that money is not the only way you can be generous around the holidays
By Becca Stanek, The Week US Published
-
4 tips for hosting an ecofriendly Thanksgiving
The Week Recommends Coming together for the holidays typically produces a ton of waste, but with proper preparation, you can have an environmentally friendly gathering.
By Theara Coleman, The Week US Published
-
Jussie Smollet conviction overturned on appeal
Speed Read The Illinois Supreme Court overturned the actor's conviction on charges of staging a racist and homophobic attack against himself in 2019
By Peter Weber, The Week US Published
-
Credit Suisse: will emergency lifeline calm global bank fears?
Today's Big Question Sell-off at Switzerland’s second-largest bank came days after Silicon Valley Bank collapse
By The Week Staff Published
-
Labour shortages: the ‘most urgent problem’ facing the UK economy right now
Speed Read Britain is currently in the grip of an ‘employment crisis’
By The Week Staff Published
-
Will the energy war hurt Europe more than Russia?
Speed Read European Commission proposes a total ban on Russian oil
By The Week Staff Published
-
Will Elon Musk manage to take over Twitter?
Speed Read The world’s richest man has launched a hostile takeover bid worth $43bn
By The Week Staff Last updated
-
A timeline of the Credit Suisse scandals
feature The Swiss bank is in crisis mode again after a massive leak of data
By The Week Published
-
Shoppers urged not to buy into dodgy Black Friday deals
Speed Read Consumer watchdog says better prices can be had on most of the so-called bargain offers
By The Week Staff Published
-
Ryanair: readying for departure from London
Speed Read Plans to delist Ryanair from the London Stock Exchange could spell ‘another blow’ to the ‘dwindling’ London market
By The Week Staff Published
-
Out of fashion: Asos ‘curse’ has struck again
Speed Read Share price tumbles following the departure of CEO Nick Beighton
By The Week Staff Published