Despite canceling its plans to get an initial public offering for its Swiss Bank Unit, Credit Suisse Group AG announced on Wednesday its plans to raise around $4.2 billion through the selling of its shares. This will strengthen the company's balances and boost its capital ratio by 13.4%.

Capital Raising Efforts

Credit Suisse which is Switzerland’s second largest bank has recently been trying to recover from yearly losses brought by restructuring decisions from current Chief executive Tidjane Thiam and stated that the decision would put away any investor concern regarding the strength of the bank’s capital.

The financial company has lost more than 5 billion francs since 2015 as CEO Thiam focused on expanding its wealth management business further in the midst of making its investment bank smaller to which Swiss banks expect a layoff of more than 10,000 employees. The bank announced backed in February that it would be cutting more than 5,000 jobs to further cut costs and boost its finances.

Although Credit Suisse shareholders have seen the decision to be the right one, most of them have also found it to be unnecessary. Analysts, on the other hand, have commended the company’s wealth management.

Despite the slightly weak outlook, shares of the company rose by around 3.7% supported by upbeat first-quarter earnings which is the highest since last March 3.

Earnings Report

The bank delivered on Wednesday their first quarter earnings that beat investor and market expectations.

For the first quarter, Credit Suisse reported a profit of 596 million francs compared to last year’s losses of 302 million francs during the same period. The lender’s revenue also rose 19% to 5.5 billion francs for the first quarter period.


CEO Tidjane Thiam announced that this quarter has been the company’s best quarter in a while. Thiam also stated that the deep and hard restructuring the company has undergone has finally reaped some results including the 10% return on capital which was originally their target for 2018 global markets and was deemed unreachable then.

Thiam also commented on the significant improvement in their operations along with the improving financial certainty due to the settlement with the U.S. Justice Department earlier this year. This was the allegations regarding the company’s supposed misselling of residential mortgaged-backed securities from 2005 until 2007.

Despite the positive numbers, Credit Suisse issued a slightly weaker outlook for their second quarter earnings.

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