Credit Suisse looks to raise $1bn as it reels from string of scandals
Beleaguered lender Credit Suisse is looking to raise over $1bn as it reels from the financial fallout of a string of scandals in the past 18 months.
The bank is mulling options to bolster its capital by over $1bn (£827m) after it slumped to a loss in the first quarter of the year on the back of heavy losses and soaring legal fees, according to sources cited by Reuters.
Selling shares to some of its major existing investors is the preferred option, but Credit Suisse has not ruled out tapping all shareholders, sources told Reuters.
A sale of a division of the firm such as its asset management arm is also under consideration, but bosses have not yet decided on a course of action. Any transaction is slated for the second half of this year, sources said.
Credit Suisse rebuffed the claims and said in a statement it is “currently not considering raising additional equity capital”.
“The Group is robustly capitalised with a CET1 ratio of 13.8% and a CET1 leverage ratio of 4.3%. Asset Management is an essential part of our group strategy presented last November, with four core divisions,” the firm said.
Jefferies analysts said in a research note today the news, if confirmed, points to “potentially more pain than we currently expect.”
The lender is reeling from twin scandals in March last year, when the implosion of U.S. investment firm Archegos Capital led to a $5.5bn hit and $10bn of supply chain finance funds (SCFF) linked to collapsed British financier Greensill were shuttered.