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Christmas decorations in front of the Credit Suisse headquarters: renovation necessary
Photo: ARND WIEGMANN / REUTERS
The shareholders of the ailing Credit Suisse have given the green light for the planned expansion of the balance sheet.
At an extraordinary general meeting on Wednesday, the vast majority of owners voted in favor of two transactions with which the major Swiss bank intends to raise a total of around four billion francs.
92 percent were in favor of the capital increase in the form of a private placement, and 98.3 percent were in favor of the subscription rights offer, as Credit Suisse announced.
The bank wants to use the money to dispel doubts about its stability and finance a far-reaching conversion to a lower-risk business.
Chairman of the Board of Directors Axel Lehmann spoke of an important step “in the development of the new Credit Suisse”.
According to Credit Suisse, the rights offering to shareholders will bring in gross CHF 2.2 billion, and the private placement around CHF 1.8 billion.
Major investors such as the Saudi National Bank have agreed to buy shares at a price of CHF 3.82 per share as part of the private placement.
The price for the subscription rights issue has not yet been finally determined, but it should be around CHF 2.52.
The transactions give investors from the Middle East even greater weight at the Zurich institute.
The Saudi National Bank (SNB), which is partly owned by the Kingdom, joins the existing owners, the sovereign wealth fund of Qatar and the Saudi Olayan family.
The Ethos Foundation as a shareholder was against the participation because of the human rights situation in Saudi Arabia, but did not find a majority.
In a previous interview with Bloomberg, SNB Chairman Ammar al-Khudairy spoke of “excellent return potential”.
The SNB will be one of the largest shareholders alongside the US fund company Harris Associates, ahead of the Qatari investment fund QIA.
Customers continue to withdraw money
The bank has been battered by scandals, lawsuits and debacles.
In 2019, she made headlines with a spy affair in which a retiring employee was shadowed in gangster fashion on the streets of Zurich.
Convictions followed, among other things, for a corruption scandal in Mozambique and unstoppable money laundering by a Bulgarian mafia.
In 2021 came the multi-billion dollar collapse of the Archegos hedge fund and the liquidation of the Greensill funds.
This year there have been negative headlines about possible CS accounts held by criminals and corrupt heads of state.
The market value was 45 billion francs in 2017, this year it slipped to ten billion francs at times.
Credit Suisse expects another loss of billions in the fourth quarter, as announced on Wednesday before the extraordinary general meeting.
At times, the share approached the record low of CHF 3.52 from the beginning of October.
The ailing major bank is suffering from difficult market conditions and has to accept heavy cash outflows, especially in the asset management business.
The bank confirmed that customers continue to withdraw money.
Group-wide, these outflows would have amounted to around six percent of assets under management by November 11.
In wealth management, the outflows in October could have been reduced, but they have not turned around yet.
Assets under management are currently around ten percent below the level at the end of the third quarter.
mmq/Reuters/dpa