Credit Suisse (CSGN.S) expects to make a pre tax loss of up to 1.5 billion Swiss francs ($1.58 billion) during its fourth quarter, the embattled Swiss bank said, as it prepares to ask shareholders permission for a $4 billion equity hike.
The profit warning on Wednesday is a blow for the bank which had previously said it expected to make a net loss during the last three months of the year but did not give a figure.
Credit Suisse is due to hold an Extraordinary General Meeting later on Wednesday where it will seek approval for the capital increase to fund a recovery from the biggest crisis in its 166-year history.
The lender’s reputation has been battered by a string of scandals and losses, including a $5.5 billion loss from the unravelling of U.S. investment firm Archegos, and it had to freeze $10 billion worth of supply chain finance funds linked to insolvent British financier Greensill.
On Wednesday it said “challenging” economic and market environment had had an adverse effect on client activity across its business.
“In particular, the Investment Bank has been impacted by the substantial industry-wide slowdown in capital markets and reduced activity in the Sales & Trading businesses, exacerbating normal seasonal declines, and the Group’s relative underperformance,” Switzerland’s second-largest bank said in a statement.