Credit Suisse To Raise CHF 4 Bln Capital Through New Shares, Sell Parts Of Securitized Assets

(RTTNews) - Swiss banking major Credit Suisse Group AG (CS) plans to raise capital with gross proceeds of about 4 billion Swiss francs through the issuance of new shares.

Credit Suisse said it signed a framework agreement to sell a significant portion of its Securitized Products Group (SPG) and other related financing businesses to an investor group led by Apollo Global Management. Closing of the proposed transaction would be expected to occur during the first half of 2023.

Credit Suisse said it will propose to an Extraordinary General Meeting to be held on November 23, 2022, to approve two separate share capital increases: a first capital increase through the issuing of new shares to a number of qualified investors, including Saudi National Bank (SNB), and a second capital increase through a rights offering for existing shareholders.

Saudi National Bank has committed to invest up to 1.5 billion Swiss francs in Credit Suisse to achieve a shareholding of up to 9.9%. Through the proposed share capital increases, Credit Suisse Group intends to raise 4.0 billion francs to further strengthen the Group's capital base and support its strategic transformation.

The bank is targeting a Group CET ratio pre-Basel III reform of at least 13% throughout the transformation and a Group CET ratio pre-Basel III reform of more than 13.5% by the end of 2025.

Credit Suisse said it has already commenced the implementation of cost reduction activities in the second half of 2022. Measures that are already mandated include a targeted 50% reduction in consultancy spend and a 30% reduction in contractor spend with the benefits expected in 2023.

A headcount reduction of 2,700 full-time-equivalent employees, or 5% of the Group's workforce, is already underway in the fourth quarter of 2022.

Credit Suisse expects to run the bank with about 43,000 full-time-equivalent employees by the end of 2025 compared to about 52,000 at the end of the third quarter of 2022, reflecting natural attrition and targeted headcount reductions.

Credit Suisse Group announced the appointment of Nita Patel as Chief Compliance Officer. She will join the Executive Board, effective November 1, 2022, reporting directly to Group Chief Executive Officer Ulrich Körner. Nita Patel succeeds Rafael Lopez Lorenzo, who has decided to step down for family reasons.