Another day, another multi-billion writedown at a bellwether financial firm. Credit Suisse (CS) reported a 2.15 billion franc loss (down from a 2.75 billion franc profit last year) after a 5.3 billion france writedown of bad debt. Shares rallied as much as 3.4% in Swiss trading, however, on comments from management that the bank was “comfortable” with its capital position, reducing fears of massive dilution. Bloomberg:
“The only positive thing is that they are not announcing a capital increase, at least not yet,” said Joerg de Vries-Hippen, who oversees about $26 billion, including Credit Suisse shares, as chief investment officer for European equities at Allianz Global Investors in Frankfurt.
While Chief Executive Officer Brady Dougan said the results were “clearly unsatisfactory,” the company’s losses have been dwarfed by UBS AG, its larger Swiss rival, which said on April 1 that it will seek 15 billion francs from shareholders to replenish capital after record losses. Royal Bank of Scotland Group Plc announced plans two days ago to raise 12 billion pounds ($23.70 billion) selling stock after debt writedowns.
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