Credit Suisse (CS) shareholders paved the way for a multi-billion dollar capital increase on Wednesday.
This should give the loss-plagued major Swiss bank the necessary financial cushion to overcome what is probably the biggest crisis in its existence.
At an extraordinary shareholders' meeting, the shareholders voted with a large majority in favor of the proposed two-stage capital increase by a total of 4 billion Swiss francs.
This clears the way for the controversial entry of the Saudi National Bank (SNB Group).
The largest bank in Saudi Arabia, which is majority-controlled by the Saudi state, will take a 9.9 percent stake in the bank.
Correspondent for politics and economy in Switzerland.
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The Chairman of the Board of Directors, Axel Lehmann, viewed the approval of the shareholders as a vote of confidence in the strategic change of course announced at the end of October.
After a number of mostly home-made scandals and imbalances, which resulted in billions in losses, the bank management wants to cut back on risky investment banking and at the same time strengthen business in asset management and in the Swiss home market.
By 2025, the Executive Board wants to reduce costs by CHF 2.5 billion or 15 percent and reduce the number of employees by 9,000 to 43,000.
The renewal of Credit Suisse is not only imperative
from a strategic and operational point of view, but also from a cultural point of view, said Lehmann in a short speech that the bank published after the general assembly.
And: "We have to take risks prudently and with the utmost professionalism." The shareholders could not go any further into this promise.
Because the shareholders' meeting did not take place in public.
Thunderstorms of criticism are spared
The shareholders could only submit questions in advance, which the bank then answered bilaterally.
Thus, the CS leadership was spared the public storm of criticism from the long-suffering (small) shareholders, which would certainly have broken the ground in the event of a face-to-face event in view of the desolate development of the bank.
The statements on the current business development published early on Wednesday morning show how far the road to recovery at CS is.
Accordingly, the bank expects a pre-tax loss of up to CHF 1.5 billion in the fourth quarter.
The bank does not comment on the expected bottom line result.
After the first nine months of this year, a net loss of 5.9 billion francs had been posted.
Losses in the final quarter came mostly from investment banking.
This suffered not only from the deteriorated market environment, but also from the initiated withdrawal from various business areas.
This eliminates risks, but also returns.
Credit Suisse also expects a loss in wealth management in the final quarter.
Customers withdraw 84 billion francs
In its flagship discipline, the bank lost customers in droves as a result of the many headline-grabbing scandals.
In the first two weeks of October, CS reported outflows of deposits and net assets that were well above the rates of the third quarter of 2022.
At group level, the net outflows as of November 11, 2022 were around 6 percent of the assets that the bank had under management at the end of the third quarter of 2022.
From this information it can be calculated that CS lost customer money of 84 billion francs in the period mentioned.
Actual quarterly results depended "on a number of factors," including continued exit from deals no longer considered material.
As reported, CS wants to part with properties such as the Hotel Savoy in Zurich.
However, it is still unclear whether a sale will take place by the end of the year.
The bank is also likely to make a loss in 2023.
The CEO Ulrich Körner has only promised that the bank will be "definitely" profitable from 2024 onwards.
Andreas Venditti, analyst at Bank Vontobel, considers the massive net outflows in CS's core business to be "very worrying - all the more so since they have not yet reversed".
Credit Suisse needs to regain trust as soon as possible, but that's harder said than done.
There was no confidence on the stock exchange on Wednesday: the already severely battered CS share price fell by 5 percent to CHF 3.67.