Credit Suisse to raise $6 bln as new CEO shows his hand

* New Credit Suisse CEO targets Asia, private banking growth

* Plans to raise $6.3 bln from share sales

* To shrink investment bank, cut costs

* Mood soured by weak third quarter results (Adds comments from CEO)

By Joshua Franklin

ZURICH, Oct (HKSE: 3366-OL.HK - news) 21 (Reuters) - Credit Suisse (LSE: 0QP5.L - news) plans to raise 6 billion Swiss francs ($6.3 billion) from investors, slim down its investment bank and cut jobs as new chief Tidjane Thiam embarks on the biggest overhaul of the Swiss bank in almost a decade.

Credit Suisse is emphasising wealth management and growing in Asia, echoing moves by rival UBS (NYSEArca: FBGX - news) . It (Other OTC: ITGL - news) joins rivals including Barclays (LSE: BARC.L - news) and Deutsche Bank (Other OTC: DBAGF - news) as well as UBS in scaling back investment banking as tougher regulations squeeze profitability.

Thiam, 53, hired from insurer Prudential (HKSE: 2378.HK - news) , also said he will float shares in Credit Suisse's domestic Swiss bank and cut 2 billion francs in annual costs, giving his vision for Switzerland's second-biggest bank almost four months into the job.

He is raising cash to bolster the bank's capital position, which is one of the weakest in the sector. Thiam said the decision had gone down well with regulators in a meeting.

"When I said I'll certainly recommend a capital raise I could hear the sigh of relief. The temperature went up two or three degrees in the room," Thiam told analysts.

Thiam, a former Ivory Coast government minister who replaced American Brady Dougan, said weak quarterly results underscored the Zurich-based bank's need for change. Third-quarter pretax income fell 34 percent to 861 million francs after the investment bank fell to a 125 million franc loss from a 516 million franc profit a year ago.

Analysts welcomed most aspects of Thiam's plans, but said sentiment was soured by the weak results.

"We see today's announcement to shrink the investment bank, attack the cost base in earnest and simplify group structure will, over time, drive value creation," said Huw van Steenis at Morgan Stanley (Xetra: 885836 - news) . "But a weak Q3 in FICC (fixed income, currencies and commodities) and heavier costs will clearly drag before Credit Suisse puts flesh on the skeletal new plan."

Credit Suisse shares fell as much as 5.2 percent and by 1510 GMT were down 3.6 percent. The stock has dropped 3 percent this year against a rise of more than 11 percent for UBS.

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Thiam said Credit Suisse would put more focus on managing the fortunes of the world's wealthy, especially in emerging markets.

Credit Suisse is the world's fourth biggest private bank and the third biggest in Asia. Thiam, who spearheaded strong growth in Asia in his previous job at Prudential, said he wants to more than double income from Asia to 2.1 billion francs by 2018.

He also aims to increase the bank's international wealth management income by 62 percent to 2.1 billion by 2018, and grow income in Switzerland by 44 percent to 2.3 billion.

He plans to cut gross costs by 3.5 billion francs by end- 2018 and will invest 1.5 billion francs in growth initiatives, to reduce the cost base to between 18.5 billion and 19 billion.

"The new strategy of focusing on the Swiss market and wealth management is attractive," said Helmut Hipper, a fund manager with Credit Suisse shareholder Union Investment.

"To shrink the investment bank should create value. The goal of strengthening its Asian footprint is a good idea, but then, how can you do this without acquisitions and how would you pay for those?" he added.

The bank will reduce the number of its staff in Switzerland by a net 1,600 over the next three years, and will cut the number of its investment bank staff in London. Thiam estimated 1,800 of its London-based staff did not need to be in such a costly location.

It aims to raise 1.35 billion francs from selling shares to a number of investors at 5.5 percent below their price on Tuesday, and to raise a further 4.7 billion via a rights issue to existing investors.

Thiam said the bank's common equity capital adequacy ratio should rise to 12.2 percent of risk-adjusted assets, and the bank aims to keep that ratio above 12 percent.

By comparison, UBS is one of the strongest capitalised banks in the world, with a common equity ratio of 14.4 percent at the end of June. The average for Europe's 24 biggest banks was 13.2 percent, lifted by high levels at Nordic lenders.

Thiam also aims to streamline the bank by creating three geographic divisions: a Swiss universal bank, Asia Pacific, and International wealth management; and two investment bank units: global markets, and investment banking and capital markets.

Thiam intends to lower capital used by the investment bank, mainly in its "macro" businesses, which includes foreign exchange and rates trading products, and where the bank plans to reduce risk-weighted assets by 72 percent by year end.

He said Credit Suisse needed to maintain an investment bank to provide products for the rich individuals his private bank is targeting.

"This is why they come to us," Thiam said. "If you don't have that all you have is people taking them out to lunch. That's not a business model, long-term." ($1 = 0.9554 Swiss francs)

(Additional reporting Oliver Hirt and Arno Schuetze; Writing by Steve Slater; Editing by David Holmes and Keith Weir)