Shareholders of Credit Suisse (CS) have approved a $4.2 billion U.S. capital raise aimed at financing the Swiss bank’s strategic overhaul.
Credit Suisse’s plan to raise capital is split into two parts. The first, which was backed by 92% of shareholders, grants shares to new investors via a private placement.
The new share offering will see the Saudi National Bank take a 9.9% stake in Credit Suisse, making it the bank’s largest shareholder.
The second capital increase issues newly registered shares with pre-emptive rights to existing shareholders and passed with 98% approval.
Credit Suisse said in a statement that the votes marked an important step in building “the new Credit Suisse.”
News of the capital raise comes as Credit Suisse projected a $1.6 billion U.S. loss for the current fourth quarter as it begins its second strategic overhaul in less than a year.
Going forward, Credit Suisse said it plans to focus its business on wealth management and the domestic Swiss market.
The restructuring aims to shift billions of dollars of assets from the underperforming investment banking unit to the wealth management and domestic divisions, and to reduce the bank’s costs 15% by 2025.
Credit Suisse has laboured under mounting losses at its investment banking unit and been criticized for poor internal risk controls and several bad investments in recent years.
Credit Suisse’s stock is down 59% this year and trading at $4.09 U.S. per share.
