stockmarketwalk To fill Credit Suisse capital gap of around 4.5 billion Swiss francs ($4.48 billion), the bank is preparing to sell part of its Swiss house bank.
The Credit Suisse is also looking for possibility to sell its Savoy Hotel, which is located in Zurich’s financial district. The worth of hotel takes roughly 400 million Swiss francs according to Inside Paradeplatz.
It has hatched plans to split its investment bank into three different parts. It is because the bank has been suffering from relentless scandals over 3 years.
If that wasn’t enough, the bank lost more than $5 billion in the collapse of Archegos investment last year. It also had to suspend client funds related to financier Greensill Capital.
As part of the strategic transformation, the bank plans a large reduction in staff. It may affect up to 6,000 of the group’s 50,000 global employees.
The board has ruled out the option to sell Credit Suisse’s wealth management and private banking businesses. In addition, Credit Suisse continues to exit small, loss-making markets. The bank’s board is confident that after accounting for legal and restructuring costs, the capital shortfall will be around 4-4.5 billion Swiss francs. However, some market analysts have the concern that this figure will be much higher.
Expected loss for fiscal year
Moody’s expects Credit Suisse’s losses to swell to $3 billion by the end of the year, pushing its Tier 1 capital below the crucial 13% level.
Credit Suisse reported a loss of 1.9 billion Swiss francs ($1.92 billion) for the first half. Previously, the bank still said that the CET1 ratio would take between 13% and 14% for 2022.
In a later statement, the bank forecasted further losses of up to $3 billion in the second half of year. This would mean CET1 would be just under 13%.
Key takeaways:
- Credit Suisse attempts to a capital hole of 4.5 billion Swiss francs ($4.48 billion)
- Layoff on the table up to 6,000 employees
- Expected loss of $3 billion by the end of the year, with that CET1 would be just under 13%
Picture: Rillke, Wikimedia Commons
Source: Reuters
