Credit Suisse Group AG said it will raise 4 billion Swiss francs ($4.02 billion) through a share-capital increase, abandoning plans for a partial sale of its Swiss unit as the banking giant reported a first-quarter profit that topped analyst expectations.
Credit Suisse Wednesday posted net income of 596 million Swiss francs, versus a year-earlier net loss of 302 million francs, on strong performance in its wealth-management and global-markets divisions.
Revenue was up 19%, to 5.5 billion francs. The median forecast of outside analyst forecasts compiled by the bank was for net income of 332 million francs on revenue of around 5.5 billion francs.
The Swiss banking giant also said its board will propose a share-capital increase of 4 billion francs through new-share issuance, to be considered at an extraordinary general meeting on May 18. The announcement indicates that it will drop plans for a partial initial public offering of its Swiss unit later this year, which would have also raised fresh capital.
Credit Suisse endured a bumpy 2016 as it shifted from the volatile investment-banking business toward wealth management. Last year ended with the bank's reaching a $5.3 billion settlement with U.S. authorities to resolve a case involving mortgage-backed securities sold in the run-up to the financial crisis.
The bank posted a 2.4 billion franc loss last year.
Credit Suisse had previously signaled that 2017 had gotten off to a strong start, particularly in its investment-banking and wealth-management units, due to the rosier mood in financial markets following the U.S. presidential election.
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(END) Dow Jones Newswires
April 26, 2017 02:33 ET (06:33 GMT)