Yahoo Finance Credit Suisse plans to raise more than £3bn in rights offering
Credit Suisse has announced a $4bn (£3.1bn) rights offering as it abandons plans to hold a partial initial public offering of its Swiss business.
“We have decided not to pursue a partial initial public offering of our Swiss banking subsidiary Credit Suisse (Schweiz) AG, thus retaining full ownership of a historically stable income stream in our home market of Switzerland and avoiding complexity in the business structure and activities of a key division of the group,” the bank said in a statement.
A project that began in late 2015, the Swiss listing ran into opposition from analysts and investors, who questioned the merit of splitting a business that generates more pre-tax profit than other units.
Credit Suisse’s shares have rebounded from a record low in July, making it more attractive for the bank to issue equity in the entire company.
The bank expects its common equity Tier 1 capital, a measure of its ability to absorb losses, to be 13.4pc following the capital increase of 4 billion CHF, which it will propose at an extraordinary shareholder meeting on May 18.
Credit Suisse would be the third major European bank to sell shares this year. Deutsche Bank and UniCredit raised €8bn and €13bn euros respectively, taking advantage of higher share prices.
European banks have rallied on the prospect that economic growth and rising interest rates could help revive earnings. But Credit Suisse is still down more than 30pc from when chief executive Tidjane Thiam announced the IPO plan in October 2015.
