Credit Suisse shareholders approve capital increase of 4 billion Swiss francs

  • More than 90% of shareholders approve the two parts of the capital increase
  • President says important step in turnaround has been taken
  • Stocks fall and CDS rise after approval and profit warning

ZURICH, November 23 (Reuters) – Credit Suisse (CSGN.S) Shareholders on Wednesday approved a capital increase of 4 billion Swiss francs ($4.20 billion) to finance the recovery of the ailing Swiss bank.

Some 92% and 98% of shareholders at the extraordinary general meeting backed the two capital increases first proposed last month as part of the scandal-prone bank’s restructuring plan.

“Today’s shareholder vote marks another important step in our journey towards building the new Credit Suisse,” said Chairman Axel Lehmann.

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

The approval came after Credit Suisse said on Wednesday it expects a pre-tax loss of up to 1.5 billion Swiss francs ($1.58 billion) in its fourth quarter, saying that the “difficult” economic and market environment had a negative effect on customers’ business as a whole. Company.

The warning sent Credit Suisse shares tumbling as the stock fell 4.8% in morning trade, while the cost of insuring the bank’s debt against default also rose. .

To fund an overhaul that will see it cut thousands of jobs and shrink its investment bank, Credit Suisse had drawn up a plan that would give new and existing shareholders the chance to buy new shares.

Switzerland’s second-biggest bank said last month that new investors had pledged to buy 462 million new shares at a purchase price of 3.82 Swiss francs ($3.83), or 94% of the volume-weighted average price of Credit Suisse shares on October 27. and 28, raising 1.76 billion Swiss francs.

Some 307.6 million of the new shares are expected to be purchased in a private placement by Saudi National Bank (1180.SE)giving him a 9.9% stake in Credit Suisse.

Shareholders also accepted a rights offering on Wednesday that gives existing investors the option to buy 889 million shares at 2.52 francs per share, with subscription rights matching the size of their current stake.

Final terms of the rights issue are expected to be announced on Thursday.

($1 = 0.9520 Swiss francs)

Reporting by Noele Illien, editing by John Revill, Kirsten Donovan and Emelia Sithole-Matarise

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