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Qatar firm backs up Credit Suisse

Written by Gary Howes
Thursday, 16 October 2008
Bank looks to all sectors to boost its capital positions. In response to the Swiss Federal Banking Commission (SFBC) capital targets Credit Suisse (NYSE:CS) has raised tier 1 capital from a small group of major global investors, the largest participant being the Qatar Holding LLC, a wholly-owned subsidiary of the Qatar Investment Authority. Related Articles Morning business news: 19 December Credit Suisse restructures UBS changes Board compensation model Credit Suisse: Europe economic conditions improve UBS Chairman heads to court The sale involves approximately 93 million Credit Suisse Group treasury shares for proceeds of approximately CHF 3.2 billion of common equity. The bank has also issued mandatory convertible bonds convertible into approximately 50 million new shares of common equity for proceeds of approximately CHF 1.7 billion. The bank now believes it is in a strong position as its Tier 1 capital has been increased through this transaction by net proceeds of approximately CHF 10 billion, taking the tier 1 ratio as of September 30, 2008, on a pro-forma basis, to approximately 13.7%; as of the end of the third quarter, the tier 1 ratio was approximately 10.4%. Credit Suisse now already exceeds the SFBC's 2013 capital targets and minimum leverage requirements. Brady W. Dougan, Chief Executive Officer said, "over the past few months we have had a constructive and close dialog with regulators about future capital requirements. We are very pleased to have reached a solution that further strengthens our capital base and ensures our competitive position. Credit Suisse is very strongly capitalized and these measures mean that we immediately exceed the revised regulatory requirement for 2013. This positions us ideally to take advantage of opportunities for further growth in our targeted businesses." Bailout for UBS Other media outlets this morning suggested Credit Suisse had joined UBS in a Government bailout - but this is not the case. UBS is in fact the only Swiss bank looking for Government help due to its exposure to the sub-prime crisis. UBS received a Sfr6bn (£3bn) capital injection from the government in the form of mandatory convertible notes.