Almost a quarter of a billion down the drain again. So on Monday, the result of the agreement between Credit Suisse and Paris in the conduct of black money. Not long ago, the Swiss paid half a billion to the US due to the junk-mortgage dispute 14 years ago, and then 200 million due to WhatsApp chats.
All this happened in October. In July, the amount CS needed to turn into a billionaire from the East rose to more than 600 million.
Total in the short period since the hot summer: 1,500 million.
This does not include anticipated damage payments related to raising Greensill with closed money. There, another 1.5 to 2 billion could come to CS. Money flows from the bank. A quarter of a billion fines and penalties, as on Monday, are now accepted with a shrug of my shoulders.
bleeding in installments. On the plus side it looks smaller. Sales of Allfunds and the Savoy, a luxury hotel in Paradeplatz, likely won’t fetch 800 million. Additional divestitures, including Six, Bank Now and Swisscard, are unlikely to fill the gap. So it all depends on what the big pieces mean in the bottom line: the planned sales at the investment bank.
Depending on CS it needs more or less new capital.
Since it needs billions more to reorganize with thousands of jobs going away and bonuses for retaining talent, the bank probably won’t be able to avoid raising capital. Thursday will show the size of this order. Then CS presents its plan called “The New Bank”.
The crucial question will be what the Swiss will have to keep the old assets from the areas sold to the investment bank. This “bad bank” becomes the crux of the matter.
Who wants to fund a pot full of uncertain assets? Who risks in the end? It will help sales that will generate a few billion instead of a few hundred million like previous sales. For example asset management.
But this should be part of New CS. An emergency sale will be the maximum percentage.
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This article appeared on October 25 on «Inside the showroom»
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