As the new CEO of Credit Suisse (NYSE:CS) since July, Mr. Tidjane Thiam is going to take big actions. On Wednesday, October 21, 2015, Credit Suisse, Switzerland’s second biggest bank, is about to raise capital of $6.2 billion ($6.05 Swiss francs) in fresh capital. The fresh capital will include rights offering of 4.7 billion Swiss francs and a private replacement of 1.35 billion Swiss francs.
According to CNBC, Tidjane Thiam said:” We are going to take capital off the table, so then we can talk about business.”
From the recent third-quarter earnings report, Credit Suisse has been going through a tough time, as major investment banks on Wall Street has. The net income in the period was 779 million Swiss Francs ($816.5 million) and fell 24% compared the same quarter last year. The profits dropped down because of low client activities in wealth management and investment banking.
Another action of Tidjane Thiam`s plan is to move nearly 2000 back office positions out of London to cheaper locations like India, which may be potentially contributed to annual cost saving of $200 million. Tidjane Thiam warned that it would be harm to London`s status as a global financial center if the high capital costs forces this move to go on. This is also a part of the new CEO`s strategy. Besides raising capitals, the bank expects to achieve 3.5 billion Swiss francs savings by the end of 2018.