Credit Suisse chairman denies plans to sell or raise capital after mammoth loss

A indicator previously mentioned the entrance to the Credit Suisse Team AG headquarters in Zurich, Switzerland, on Monday, Nov. 1, 2021.

Thi My Lien Nguyen | Bloomberg | Getty Pictures

Credit rating Suisse Chairman Axel Lehmann denied any intention to sell or merge the embattled Swiss lender soon after it noted a significant second-quarter reduction.

The financial institution posted a internet reduction of 1.593 billion Swiss francs ($1.66 billion) on Wednesday and declared the speedy resignation of CEO Thomas Gottstein, who will be replaced by asset administration CEO Ulrich Koerner.

Credit score Suisse vowed to ramp up its attempts to overhaul the group’s composition in the wake of mounting losses and a string of scandals — most notably the Archegos hedge fund collapse — that have resulted in substantial litigation expenses.

Speculation has emerged in modern months that Credit score Suisse may possibly be thinking about a money increase and even a feasible sale of the organization, but Lehmann instructed CNBC’s Geoff Cutmore Wednesday that neither was in the playing cards.

“On capital, we reported, despite the decline nowadays, a CET1 ratio of 13.5%. I am delighted to see that range and we will guide the industry also, in light of the uncertainty, that we are unquestionably going to defend our CET1 ratio until finally the finish of the 12 months, concerning 13 and 14%,” Lehmann said. CET 1, or widespread fairness tier just one capital, ratio is a measure of a bank’s solvency.

“So I assume we are great on that a single, and we will control that really, incredibly tightly.”

He also branded some of the speculation — such as the recommendation in a Swiss weblog early very last thirty day period that U.S. lender Condition Road could be readying a takeover bid for Credit rating Suisse — as “very ridiculous.”

Questioned if he experienced any ideas to market the business or merge with another bank, Lehmann claimed “that is a obvious no.”

Credit Suisse has released a strategic evaluate as it seems to be to cut charges, redirect its wealth and asset management functions and overhaul its compliance and risk administration capabilities. 

In Wednesday’s earnings report, the financial institution said it will supply even further specifics on the progress of the evaluation in the third quarter.

“We will be even additional centered heading forward on our wealth management franchise, multi-expert asset supervisor and the quite, quite powerful Swiss enterprise,” Lehmann reported.

“We will have a highly competitive banking small business and we will align the markets small business improved to provide the requirements of our wealth management and Swiss customers.”

He extra that the board wishes to convey down its absolute value foundation to significantly less than 15.5 billion Swiss francs in the medium expression.

Having said that, Lehmann refused to be drawn on how many job losses this will entail, as an alternative promising much more thorough strategies for the charge-chopping approach in the third-quarter earnings.

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