Credit Suisse requests investors for billions post bumper loss

Credit Suisse, maltreated by years of scandals, plans to raise 4 billion Swiss francs ($4 billion) by selling stock while cutting thousands of jobs and spinning off its investment bank to recover from a string of heavy losses.

The troubled bank outlined what Axel Lehmann, Credit Suisse’s Chairman, christened a “blueprint for success,” after amassing a 4 billion Swiss franc loss in the third quarter of 2022 and following torrid weeks for the group.

The bank’s clients withdrew funds in recent weeks at a pace that saw the bank breach some regulatory requirements for liquidity, Credit Suisse said, emphasizing the impact on its business of the social media storm and wild market swings.

The turnaround plan has many elements, from refocusing on banking for the wealthy to cutting jobs.

The bank will cut 5% of its workforce or 2,700 jobs by the end of 2022, and ultimately reduce its workforce by nearly 9,000 to about 43,0000 by the end of 2025.

Credit Suisse said it also aims to separate its investment bank to create CS First Boston, focused on advisory and capital markets, and hopes to attract third-party capital and set up a partnership with the new bank.

In 2021, the bank took a $5.5 billion loss from the unraveling of US investment firm Archegos and had to freeze $10 billion worth of supply chain funds linked to insolvent British financier Greensil, highlighting risk-management failings.