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Credit Suisse to raise $6B: London job cuts eyed

Credit Suisse, Switzerland's second biggest bank, is to raise a total of 6.05 billion Swiss francs ($6.2 billion) in fresh capital through a rights issue and private placement, as its new chief executive tries to address investors' concerns.

Tidjane Thiam, brought in as chief executive in July from insurer Prudential, told CNBC the amount was "less than a lot of the numbers I have read".

"I wanted to take capital off the table, so that when we meet we can talk about the business," he added.

The bank is considering moving nearly 2,000 back-office jobs out of London, with a potential saving of 230 million Swiss francs, because of the U.K. capital's high costs, Thiam told reporters. If this move goes ahead, it could potentially damage London's status as a global financial center.

The bank will also cut jobs in Switzerland over the next three years through natural attrition.

The Zurich-based bank also reported slightly disappointing net income for the three months to September 30 of 779 billion Swiss francs, and core pre-tax profit of 861 million Swiss francs. The bank warned that both wealth management and the investment bank had been impacted by low client activity and adverse market conditions.

The fresh capital will include a private placement of 1.35 billion Swiss francs and a 4.7 billion Swiss francs rights offering.

Thiam announced plans to scale back the investment banking business in favor of wealth management, as many in the market had expected. The bank now plans to focus on wealthy entrepreneurs in emerging markets for its wealth management division.

Thiam also foresees savings of 3.5 billion Swiss francs by the end of 2018 and plans to fundamentally change Credit Suisse's leadership structure, with 6 new board members appointed.

He told CNBC: "A lot of it (the strategy change) is already being executed. It's really a bottom-up plan."

"We're not just about cutting costs, we're also investing for the future."

Credit Suisse private banking
Chris Ratcliffe | Bloomberg | Getty Images

Credit Suisse is also planning to create a Swiss universal bank, which Thiam described as "unique in Europe…focused on the wealthiest market in the world".

It hopes to take advantage of the consolidation of the country's lucrative private banking sector.

Asked about dividend payouts at the bank, Thiam said it is a priority and added: "We don't have a money-printing machine – the only way we can produce money is by operating profitably."


The bank said in a statement it would "significantly" reduce the use of capital at its investment bank.

Thiam had hinted at the possibility of a capital raising in an interview with CNBC shortly after he was appointed.

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