Credit Suisse investors back cash calls for restructuring

[November 19, 2015]  By Joshua Franklin

BERN, Switzerland (Reuters) - Credit Suisse shareholders on Thursday overwhelmingly backed capital increases totaling around 6 billion Swiss francs ($5.9 bln) to bulk up the Swiss bank's balance sheet and help fund a restructuring.

The bank announced the cash calls last month as part of a new strategy under Chief Executive Tidjane Thiam who has embarked on the biggest overhaul of the Zurich-based bank in almost a decade.

Thiam told investors the bank's capital position, an area where it has lagged major rivals and drawn criticism from some investors, had hampered its business.

"Constraints related to our capital have sometimes limited our ability to capture profitable growth opportunities in the market," Thiam said in a speech to an investor meeting in Bern.

"Quite a few times since I took office, I have heard our teams in Asia or elsewhere, which generate returns well in excess of their cost of capital, telling me about missing out on attractive opportunities because of capital constraints."

A 1.32 billion franc private placement won nearly 95 percent support at the meeting, while a rights issue with expected gross proceeds of up to 4.7 billion francs got 96 percent of the vote.

The capital increases will lift Credit Suisse's look-through CET1 capital ratio to 12.2 percent while its CET1 leverage ratio, a measure of the bank's debt levels, will rise to 3.6 percent at the end of 2015, Thiam said.

The meeting was also a chance for Thiam to build bridges with Swiss retail investors who in the past had given his American predecessor Brady Dougan a tough time over large pay packets and his failure to learn German.

In a sharp contrast to Dougan, who mostly addressed investors in English, native French speaker Thiam spoke in German for the first few minutes of his speech before switching to French.

Under Thiam, Credit Suisse is aiming to focus more on wealth management in emerging markets, cut investment banking and bulk up its balance sheet.

Its decision to emphasize wealth management and grow in Asia mirrors moves by local rival UBS.

Thiam also told shareholders that the bank was making progress in shrinking its investment bank as part of a restructuring.

($1 = 1.0177 Swiss francs)

(Editing by Michael Shields and Susan Fenton)

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