Credit Suisse shareholders approve $4.2b capital raise

ZURICH: Credit Suisse shareholders on Wednesday approved a 4 billion Swiss franc ($4.2 billion) equity capital hike earmarked to finance the embatled Swiss bank’s turnaround.

Some 92 per cent and 98 per cent of shareholders at an extraordinary general meeting supported the two share capital increases which were first proposed last month under the scandal-prone bank’s restructuring plan.

“Today’s vote by shareholders marks a further important step in our journey to build the new Credit Suisse” chairman Axel Lehmann said.

“This vote confirms confidence in the strategy, as we presented it in October, and we are fully focused on delivering our strategic priorities to lay the foundation for future profitable growth,” he added.

The approval came ater Credit Suisse on Wednesday announced it expects a pre-tax loss of up to 1.5 billion Swiss francs ($1.58 billion) in its fourth quarter, saying the “challenging” economic and market environment had an adverse effect on client activity across its business. The warning sent Credit Suisse’s shares reeling, with the stock down 4.8 per cent in morning trading, while the cost of insuring the bank’s debt against default also rose.

Tofundanoverhaulwhichwillseeitcutthousands of jobs and scale back its investment bank, Credit Suisse had drawn up a plan that would give new and existing shareholders the chance to buy new shares.

Switzerland’ssecond-largestbanksaidlastmonth that new investors had commited to buy 462 million new shares at a purchase price of 3.82 Swiss francs ($3.83), equivalent to 94 per cent of the volumeweighted average price of Credit Suisse shares on Oct.27 and 28, raising 1.76 billion Swiss francs.