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Credit Suisse Plans GBP3bn Fundraising To Boost Capital

April 26, 2017
in International
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Credit Suisse says it plans to raise 4bn Swiss francs (£3.14bn) from shareholders in an effort to strengthen its capital base.

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The Swiss lender put on hold a plan to sell shares in its domestic banking business and posted a first quarter profit of 596m Swiss francs.

That compares with a 302m Swiss franc loss a year ago.

Swiss banks are under pressure from regulators to boost capital to protect them from financial shocks.

The bank raised about 6bn francs from shareholders in 2015.

As well as asking its owners for cash to mend its balance sheet, Credit Suisse has said it is in the middle of a 5,500 job-cutting programme.

‘Concern zone’

Raising the new money will increase its tier-one leverage ratio – how much capital it has to absorb losses from lending as a percentage of its total lending – to about 5.1%, it said.

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.”

Mr Barua had estimated that the bank would raise 5bn Swiss francs.

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Tags: analystbankBanking in SwitzerlandBernsteinBusiness_FinanceChirantan BaruaCredit SuisseDiversified Investment ServicesEconomy of SwitzerlandfinanceFinancial servicesInvestment banksSwiss francSwitzerland

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