By: Ken Chase
Embattled Swiss firm Credit Suisse received some good news this week as shareholders gave their approval to the lender’s plan to raise $4.2 billion. That approval greenlights the firm’s plan to raise capital from the Saudi National Bank, which will receive a 9.9 percent stake in Credit Suisse and become the company’s largest shareholder.
That news came as Credit Suisse revealed projected fourth quarter losses of $1.6 billion.
The firm’s chairman, Axel Lehmann, expressed optimism about the successful shareholder vote and noted its importance in enabling the company to build a “new Credit Suisse.” According to Lehmann, the shareholder stamp of approval “confirms confidence in the strategy, as we presented it in October, and we are fully focused on delivering our strategic priorities to lay the foundation for future profitable growth.”
The plan announced last month would see Credit Suisse make a number of structural moves designed to create a simpler business model focused on its domestic market and wealth management. The firm plans to sell its securities products division to two U.S. investment firms and reduce the footprint of its own investment services.
If successful, the strategic revamp could help Credit Suisse cut its exposure to risky assets and lower its cost base by about 15% in the next three years.
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