Posted on 10/08/2015 7:00:54 PM PDT by nickcarraway
Tidjane Thiam, Credit Suisse’s new chief executive, is preparing to launch a substantial capital raising when he unveils his strategic plan for the bank in two weeks’ time, according to people briefed on the plan.
While not specifying an amount, they pointed to a poll published last week by analysts at Goldman Sachs concluding that 91 per cent of investors expect the Swiss bank to raise more than SFr5bn in new equity.
The move follows a warning by Deutsche Bank that it was set to scrap its dividend for the first time since the second world war after it incurred a €6.2bn net loss in the third quarter because of big charges taken to back restructuring being undertaken by new chief executive John Cryan.
The major restructuring under way at the Swiss and German lenders is a stark reminder that Europe’s big investment banks are still struggling to adapt to the post-crisis world and are being left behind by US rivals. Having been slower to reform and harder hit by European regulation, they have lost market share in many areas.
Credit Suisse’s fresh capital is likely to be used to absorb losses triggered by a faster restructuring of the Swiss group, the people briefed on Mr Thiam’s plan said. But the bank will also need higher capital ratios to comply with toughening demands from regulators.
The Swiss authorities are expected to announce an increase of minimum capital ratios over the coming months, which could prove more challenging for the bank than its better capitalised local rival, UBS. Credit Suisse’s common equity tier one capital ratio of 10.3 per cent compares with UBS’s 13.5 per cent.
(Excerpt) Read more at ft.com ...
Nothing to see here...
In other words they are way over the ratio of deposits claimed and cash on hand, 10 or 20% is the current watermark, still crazy that little can be leveraged for so much...
Hanky and Panky...
Virtual Money...
Game is drawing to a close, at least how it used to be...
The US investment and commercial banks are probably taking a lot of business in Europe. They have plenty of capital, and are able to make loans as opportunities become available.
There are a lot of strong corporate borrowers in Germany, the UK, and Scandinavia.
He looks serious but Jack Welch would just layoff 10% of the workforce and delayer his managers.
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