Investor have concerns over C Suisse's capital and strategy

Credit Suisse Canary Wharf

Credit Suisse CEO Brady Dougan tried to put the bank’s legal woes behind it with the U.S. tax-probe settlement. He hasn’t assuaged investor concern about the bank’s capital and strategy.

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 ?'.

To access the complete Bloomberg article hit the link below:

Credit Suisse Guilty Plea Stokes Investor Concern Over Strategy 

Credit Suisse Clients Remain Secret as Bank to Help U.S.

JefferiesAnd the Best Place to Work in the global financial markets 2017 is...

Register for Financial Markets News Alerts