Credit Suisse announces capital raise, shares take hit
Credit Suisse shares were knocked lower after the investment bank announced that it would go cap in hand to shareholders after sustaining a further hit from the blowup of hedge fund Archegos.
The Swiss lender said it expected to book another CHF 600m charge in the second quarter for Archegos's collapse, for total losses of $5.5bn from the incident, and that it would tap its investors for $2bn in fresh funds.
In exchange, it would reduce the leverage exposure of the prime brokerage unit unit which caters to hedge funds by $35bn, while issuing convertible notes to beef up its capital buffers.
In a Bloomberg interview, Credit Suisse chief executive officer, Thomas Gottstein, said that equated to about a third of the groups total exposure.
Management had already been forced to cut the dividend payout and suspend share buybacks as a result.
As of 1335 BST, shares of Credit Suisse were down by 4.69% to CHF 8.94.
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