Credit Suisse boosts capital by $9bn

 
City A.M. Reporter
Credit Suisse unveiled a string of measures to boost its capital base as it battles to restore investor confidence following damaging criticism from the Swiss central bank.

Credit Suisse said it would issue convertible bonds, sell assets and cut more costs, and that immediate steps would add 8.7 billion Swiss francs (£5.68bn) to its capital.

"The measures we have announced today should eliminate any of the doubt raised by the Swiss National Bank report," Credit Suisse Chief Executive Brady Dougan told a conference call.

Dougan, who had been credited for steering the bank through the financial crisis without the need for a bailout, came under heavy fire after the bank's shares tumbled last month when the SNB called for urgent action to improve its capital this year.

The SNB welcomed the move. "In an environment that remains particularly challenging for the international banking system, these measures substantially increase the resilience of Credit Suisse Group," the central bank said in a statement.

Credit Suisse shares, which had hit a 20-year low of 16.35 francs after the SNB admonition, jumped over 5 percent to 18.10 francs in early trade, the biggest rise by a European blue-chip stock.

"The focus on capital-raising and cost-cutting instead of on profits speaks for itself," said analysts at Notenstein bank.

"After the SNB's criticism of Credit Suisse's capital and the battered trust of investors, the measures should be welcomed by investors."