Newspaper article International New York Times

Credit Suisse to Raise Capital and Cut Costs ; Swiss Bank to Shrink Size of Investment Unit and Expand Asia Operations

Newspaper article International New York Times

Credit Suisse to Raise Capital and Cut Costs ; Swiss Bank to Shrink Size of Investment Unit and Expand Asia Operations

Article excerpt

The bank also reported a stiff drop in profit in the third quarter, as uncertain market conditions weighed on its fixed-income and trading operations.

Credit Suisse said Wednesday that it planned to raise up to $6.3 billion in new capital and cut its costs by $3.7 billion by the end of 2018, as Tidjane Thiam, the lender's chief executive, looked to reshape the bank and improve its profitability.

As part of a significant overhaul, the bank said it would further shrink its investment bank and would seek to expand its operations in Asia and emerging markets as it looked to attract more business from high-net-worth clients there. The bank said it would seek to publicly list part of its Swiss banking operations but would retain control of the business.

The bank, based in Zurich, also reported on Wednesday a stiff drop in profit in the third quarter as uncertain market conditions weighed on its fixed-income and trading operations.

The bank said its third-quarter profit had declined 24 percent to 779 million Swiss francs, or about $816 million.

"Our third-quarter results reinforce the need for a restructuring of the bank aimed at reducing the volatility of our earnings and better aligning the activities of our investment bank behind the needs of the clients of our private banking and wealth management division," Mr. Thiam said in a news release.

Mr. Thiam, the former chief executive at the British insurer Prudential, took the top job at Credit Suisse on July 1. Analysts have expected him to shrink Credit Suisse's investment bank and further increase the company's emphasis on its wealth management operations.

The lender, as part of a series of measures disclosed to investors on Wednesday, said it planned to "significantly" reduce capital use in the investment bank. Mr. Thiam said on Wednesday that the lender was "right-sizing" its investment bank.

Credit Suisse said on Wednesday that it planned to raise up to 6.05 billion francs through two share offerings. The bank also said it planned to further reduce its costs by 3.5 billion francs by the end of 2018.

The bank said it would streamline and realign its organizational structure, with three geographic divisions focused on its Swiss banking, Asia-Pacific and international wealth management operations. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.