Credit Suisse subject to investor scrutiny ahead of business overhaul

Oct 26 (Reuters) – Credit Suisse Group AG (CSGN.S) is set to announce major strategic overhauls on Thursday, after a string of losses and risk management failures kept the troubled Swiss bank closely watched by investors.

Analysts estimate that Switzerland’s second-largest bank could face a capital shortfall of as much as 9 billion Swiss francs ($9.1 billion), depending on the money it raises from selling some of its businesses and efforts to downsize its investment bank.

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The lender hopes its restructuring plan, details of which are expected to be released on Oct. 3 when third-quarter results are released. On the 27th, the bank will reassure investors after its shares plunged 11.5% earlier this month amid concerns about the bank’s ability to revamp its business without asking for more capital.

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Credit Suisse Chairman Axel Lehmann, who has pledged to reform the bank, said its capital base is strong. The stock has roughly halved in value this year.

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So far, questions about the bank’s restructuring and whether it will need new money to fund it remain open. Earlier this month, investors further wagered that Credit Suisse shares would still fall further, with the increase in the number of shares of the bank borrowed by investors reflecting a surge in so-called “short selling” or “short selling” of shares.

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Concerns about the bank’s finances sent some of its bonds to record lows earlier this month, and credit default swaps (CDS), an instrument used to hedge against defaults, rose to record highs in the week beginning Oct. 10. . 3.

On October 30, it announced a bond repurchase of 3 billion Swiss francs. 7 Investors are offered some assurance that the cost of insuring banks’ debt risk has fallen in recent weeks. On Wednesday, it was close to where it was before the market rout in early October.

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(1 USD = 0.9891 CHF)

Reporting by Vincent Fasseur and Davide Barbuscia; Editing by Chris Rees

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