Bloomberg News reports that the $2.6bn fine will cut Credit Suisse’s common equity ratio, a key measure of financial strength, to 9.3% from 10% at the end of March under the latest Basel rules. That’s the lowest among 16 global investment banks tracked by Bloomberg Industries.
Credit Suisse plans to raise about $560m by selling real estate and cut $15.7bn of risk-weighted assets to boost capital to 10% this year, its minimum target. Analysts questioned whether Dougan’s plan will be enough. Deutsche Bank this week announced a stock offering to boost its common equity ratio to 11.8% from 9.5%.
'I’m somewhat surprised at how sanguine you are', about capital, Jernej Omahen, an analyst at Goldman Sachs who rates the bank neutral, said on a conference call with Dougan this week. 'Why is it better to essentially scrape together these little capital releases' than 'doing a capital increase and assuring everybody that you’re at the top of the capitalization table ?'.
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