TEXT-Credit Suisse statement on capital hike, Q3

Oct 16 (Reuters) - Credit Suisse (CSGN.VX) said on Thursday it had increased its Tier 1 capital by about 10 billion francs from several major investors, including a subsidiary of the Qatar Investment Authority. [ID:nLG360081]

The Swiss bank also said it expected to post a third-quarter net loss of 1.3 billion Swiss francs ($1.15 billion) .

Here is an edited version of its statement.

SUMMARY

Credit Suisse has raised the capital through the sale of approximately 93 million Credit Suisse Group treasury shares for proceeds of approximately 3.2 billion Swiss francs of common equity.

It has also issued mandatory convertible bonds convertible into around 50 million new shares of common equity for proceeds of around 1.7 billion francs

The bank issued non-dilutive hybrid tier 1 capital for net proceeds of approximately 5.5 billion francs.

This takes the tier 1 ratio as of the end of September, on a pro-forma basis, to approximately 13.7 percent. As of the end of the third quarter, the tier 1 ratio was approximately 10.4 percent.

Credit Suisse now already exceeds the Swiss Federal Banking Commission's 2013 capital targets and minimum leverage requirements.

RESULTS

Credit Suisse also expects to post a third-quarter net loss of around 1.3 billion francs.

The group also expects a pre-tax loss of around 3.2 billion francs in investment banking, reflecting writedowns of approximately 2.4 billion francs in the leveraged finance and structured products businesses and "exceptionally adverse trading conditions in September".

But it expects strong operating results for the third quarter in private banking with strong net new asset inflows in both wealth management and in the Swiss corporate & retail banking business.

The bank had an inflow in private banking of net new assets amounting to approximately 14 billion francs, of which 11 billion francs was in wealth management and 3 billion francs in the Swiss corporate & retail banking business.

Asset management is expected to announce a pre-tax loss of approximately 50 million francs, Credit Suisse said.

SWISS AUTHORITIES SUPPORT

Credit Suisse welcomes the measures announced by the Swiss authorities, which apply to the Swiss banking system, including Credit Suisse.

These are important for Switzerland's financial institutions.

With regard to the longer-term financing structure and the associated capital investment, given the relatively low level of affected assets in its portfolio and its good access to capital markets, Credit Suisse has decided not to participate at this time.

EXECUTIVE COMMENTS:

Chief Executive Officer Brady Dougan:

"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. I am delighted that our close relationships with a number of strategic investors, who have confidence in our clear strategy and solid business model, have enabled us to raise the necessary capital.

"We very much welcome the measures announced by the Swiss authorities today, which apply to the Swiss banking system, including Credit Suisse.

"These are important for Switzerland.s financial institutions. With regard to the longer-term financing structure and the associated capital investment, given the relatively low level of affected assets in its portfolio and its good access to capital markets, Credit Suisse has decided not to participate at this time."

"The financial services sector witnessed unprecedented market disruption in September and extraordinary changes to the competitive landscape.

"These events led to a very difficult operating environment, particularly in investment banking.

"Our investment bank was impacted by the volatile conditions and the result reflects further writedowns in our leveraged finance and structured products businesses and other losses resulting from the exceptionally adverse trading conditions in September.

"We expect to announce an overall net loss of approximately CHF 1.3 billion for Credit Suisse in the third quarter.

"While understandable in the context of a difficult market environment, this result is clearly disappointing.

"We remain firmly committed to our strategy. We will continue to invest in our private banking business and aggressively transform our investment banking business, reducing our overall risk and diversifying our revenue streams.

"We will also manage our business in a disciplined, conservative manner, with a view to maintaining our exceptional capital strength and capitalizing on growth opportunities."