Credit Suisse CEO says no plans for capital hike: paper
By Emma Thomasson
ZURICH (Reuters) - Credit Suisse CSGN.VX has no plans to issue new shares after the Swiss central bank called on it to improve its capital base this year, but should be able to do so by retaining earnings, Chief Executive Brady Dougan was quoted as saying on Sunday.
"Of course I am disappointed. FINMA has given us directions as to how we should strengthen capital. We are fulfilling those," Dougan told the SonntagsZeitung paper in an interview.
"Even more surprising were the suggestions by the SNB to cut the dividend and to raise capital."
In its annual financial stability report published on Thursday, the Swiss National Bank (SNB) said Credit Suisse should urgently boost its loss-absorbing capital base by cutting risk, suspending dividends or issuing shares, sending the stock down 10 percent.
Dougan noted that FINMA is the regulator of the Swiss banks, rather than the SNB but said the bank was still taking the central bank's comments seriously. However, he rejected the idea of a capital hike: "That is not our plan".
"We assume that we will generate enough profit in the coming quarters to create extra equity capital," he said, adding that the bank was also offering shareholders the choice of receiving their dividends in shares, which demands less capital.
The criticism from the SNB has increased pressure on Dougan, who was lauded for navigating the bank through the subprime crisis relatively unscathed, but has come under fire of late for squandering that advantage as the bank's shares languish.
Dougan told the paper he had no plans to step down and was working closely with the board, but admitted some mistakes. Continued...