Credit Suisse AG will face a capital shortfall of 8 billion Swiss francs ($8 billion) in 2024, according to Goldman Sachs, further evidence of the Swiss bank’s problems, Goldman Sachs analysts told Bloomberg. .
Analysts led by Chris Hallam have estimated the gap of at least CHF4 billion, and he says the equity increase would be “prudent”, given the need to restructure investment banking operations at a time of minimal capital generation.
Speculation about the position of the Swiss bank in terms of capital and liquidity levels has affected the stability of its shares this year, leading to calls from some analysts to increase the shares.
Chief Executive Ulrich Koerner is set to detail the bank’s second strategic overhaul in a year on October 27, which is generally seen as a critical opportunity to restore confidence in the bank after more than a year of losses and management errors.
Flora Pocahut, an analyst at Jefferies, clarified Goldman’s comments, stating in a note on Tuesday that Credit Suisse needs to generate about CHF9 billion of capital within two to three years. Given the dilutive nature of the capital increase, Pocahontas expects Credit Suisse to prioritize the disposal of assets.