Credit Suisse, number two in the Swiss banking sector, grappling with a capital increase of 4 billion of Swiss francs which should allow it to restructure, it fixed in 4,07 francs the reference price for the transaction.
This price corresponds to the average price Volume-weighted shares on the Swiss stock exchange on Oct. 27 and 28, the bank said in a statement. The capital increase will be aimed at qualified investors institutions who have committed to a series of issues of 462.041.884 shares at a purchase price of 3,82 francs, he explained.
La Saudi National Bank (SNB), the largest commercial bank in theSaudi Arabia, which pledged 1,5 billion francs, equal to 9,9% of the share capital with an issue of 307.591.623 shares, according to Credit Suisse. The Swiss bank also plans to issue 889.368.458 shares giving shareholders a preferential subscription right for each share held 25th November after the close of trading. It is expected that seven subscription rights will allow them to buy two new shares at a price of 2,52 francs.
The bank's shareholders will have to vote on this capital increase in aextraordinary general meeting on 23 November.
With the restructuring expected cuts of 9.000 employees
The capital increase aims to finance an important renovation which should result in a radical transformation of investment banking and allow Credit Suisse to refocus on its more stable businesses, which are wealth management and retail banking. This will result in the cutting of 9.000 places of work by 2025.
The entrance to the Saudi Bank has aroused some discontent among the shareholders, as he is expected to become the first shareholder of Credit Suisse. But this maneuver should not have any influence on the identity of the institution, assured the CEO of the bank Ulrich Körner, in an interview with the Sunday NZZ am Sonntag. The shareholders have no influence on the management of the group or on its ethical principles, specified the CEO. "Saudi National Bank is a shareholder like any other, a major shareholder of course."
The date on which Credit Suisse will divest its capital markets and advisory businesses to the new entity CS First Boston is not yet known. «Credit Suisse will certainly own a majority stake in the initial phase», Körner explained, «perhaps there will be a stock market entry at the end of the path».
