Credit Suisse:

Lays out its rescue plan

Credit Suisse lays out its grand rescue plan for the group.

Credit Suisse: Grand rescue plan

Credit Suisse will sell or spin off most of its investment bank business and revert to focusing on its core international wealth and asset management business. It will retain some of its trading capabilities but that would be more from the execution point of view. Quitting Investment Bank business would mean saving the cash lost in deferred taxes.

Credit Suisse: Will sell or spin off

For its capital requirements, it will dilute its equity almost to the tune of 30% as it attempts to raise close to $4 billion through a share sale at an incredibly low valuation. The ROTI would just be about 6%, hence it’ll take longer to add any value to its shareholders’ portfolio

Credit Suisse: Capital Requirements

The share sale is expected to be substantially funded by the Saudi National Bank with the existing shareholders being offered rights shares. The CAR will still be at 14%. Credit Suisse will be selling its securitized products business to Apollo Global Management and PIMCO. This is expected to release nearly $3 billion of capital. However, it’s still in talking stage.

Credit Suisse: Share Sale