ZURICH – Credit Suisse Group AG Chief Executive Officer Brady Dougan succumbed to pressure from the central bank and senior executives within his firm to increase capital by 15.3 billion francs ($15.6 billion). The lender will also cut an additional 1 billion francs in costs by the end of 2013, the Zurich-based bank said in a statement Wednesday. Second-quarter net income rose 2.6 percent to 788 million francs from a year earlier, the company said. Credit Suisse shares rose as much as 6.8 percent. Dougan, 52, said the measures will almost double the bank's capital ratio from levels at the end of March, which the Swiss National Bank said required a "marked increase." While Dougan led Credit Suisse through the 2008 financial crisis without state aid, he faced mounting public criticism and internal dissent after the shares of Switzerland's second-biggest bank slumped to a 20-year low following the SNB's June 14 comments. "Brady has bitten the bullet today and these capital measures are welcome, but they're rather late," said Christopher Wheeler, a London-based analyst at Mediobanca SpA, who has a neutral rating on the stock. "He was the CEO of a bank at the end of the second quarter 2009 that was seen as a crisis winner. And yet profitability and capital weren't dealt with promptly enough." "This is a robust and balanced set of capital initiatives, close to 80 percent of which are non-dilutive," he said in a statement. "Over the past five years and prior to these measures, we have maintained one of the strongest capital levels in the industry with minimal dilution to our shareholders." The bank expects a Basel III capital ratio of 10.8 percent by the end of the year, compared with 5.9 percent the SNB cited in its financial stability report in June, it said. The capital ratio includes common equity, contingent convertible bonds and the partial use of participation securities, called Claudius notes, Credit Suisse said. The capital ratio for UBS AG, the biggest Swiss bank, was 7.5 percent at the end of March, according to the SNB report. – Agencies
