The more far-reaching Credit Suisse’s strategy is, the more capital will be needed to finance it, a Vontobel analyst says.
Vontobel expects Credit Suisse to ask shareholders to inject 4 billion Swiss francs ($4.1 billion) as part of its upcoming strategic review, analyst Andreas Venditti said in an analyst note Thursday.
Credit Suisse shares were down 19 percent last week after the market was dreading the bank's shares being further diluted through another capital raise. During Thursday morning trading, shares lost temporarily as much as 5.8 percent, dropping to 3.80 Swiss francs.
The 4 billion Swiss franc capital raise could be the result of a strategic overhaul that plans high restructuring charges and exit costs of non-core positions.
Enormous Challenge
A scenario in which the bank's expectations regarding the capital it can generate in the current market environment are low, along with potentially less return on parts of the business it aims to sell, all support the case for it turning to its investors for more cash.
With a market capitalization of just under 10 billion Swiss francs, the challenge of raising 4 billion Swiss francs would be enormous. Switzerland’s second-largest bank has announced that it will present its strategic review with 3Q22 results on October 27.
