The action Credit Suisse was doomed to stock market havoc on Friday, continuing the way of the cross started the day before after new rumors, this time concerning a capital increase of several billion.
At 11:00 a.m., the registered Credit Suisse sank nearly 5.9% compared to its already historically low closing price the day before, at 4.37 francs, after having plunged in the first exchanges at 4, 26 francs, in an SMI down 0.98%.
Since the start of the year, the stock has depreciated by nearly half. For comparison, the action of the main rival UBS – down 1.4% to 15.03 francs on Friday – lost over the same period less than 10% of its value.
Thursday afternoon, Archyde.com had indicated that the number two Swiss bank, which the recurring difficulties led to undertake a vast reorganization, had been in discussions for several weeks with large investors with a view to a capital increase to the tune of several billion. , according to sources familiar with the matter.
Requested by AWP, the management of the bank with two sails then recalled that a situation update on the strategic orientation would be presented with the figures for the third quarter, that is to say on October 27. “It would be premature to communicate any results before this date,” insisted a spokesperson.
Significant dilution in sight
In July, the group’s new managing director (CEO) Ulrich Körner explained that the bank with two veils was looking for a solution for its securitized credit activities (Securitized Products Group), the volume of which could reach 2.5 billion dollars, according to estimates relayed by Christian Schmidiger, an analyst at the Zurich Cantonal Bank (ZKB).
A possible sale of SPG and the reduction of risks in the balance sheet would result in a shortfall of up to CHF 4 billion for the announced restructuring, growth projects and equity building, which, with a market capitalization of 12 billion, would mean significant dilution for existing shareholders, reports ZKB.
Since the management of the bank in difficulty promised, in the wake of its change of boss at the end of July, an update on its strategy with the publication of its third partial, the rumors have resumed even more. The various and varied speculations circulate, in particular around the future of the investment bank and a significant reduction in the workforce.
The rumor machine is racing
As recently as Thursday morning, the Financial Times (FT) reported that Credit Suisse was considering splitting its merchant banking division into three separate units, a move to sell profitable businesses precisely to avoid a increase in capital.
The partition would be done according to a model involving three units: the group’s advisory activity, which could be separated later, a bad bank managing risky assets for sale and the rest of the division’s business, the daily said. British, citing sources familiar with the matter.
At the time of former CEO Tidjane Thiam, the number two Swiss bank had already set up a defeasance division, the Strategic Resolution Unit (SRU), which brought together under the same roof the unprofitable activities of the company. or to be transferred for other reasons.
At the beginning of September, the Sonntagszeitung had already mentioned a large dismantling of the investment bank of Credit Suisse. According to a provisional scenario which would be discussed within the board of directors of the Zurich establishment, some 5000 jobs could be deleted as part of this restructuring.
Last week, Bloomberg reported that the two-veiled bank was considering rolling out its US investment banking business again under the name ‘First Boston’, taking over the name of the entity acquired in the mid-1990s. Credit Suisse First Boston’ was discontinued in 2006.
/ATS