Credit Suisse Unveils Sweeping Revamp to Revive Its Fortunes

Credit Suisse plans to drastically shrink its investment bank and raise $4 billion in capital from Saudi investors and others in order to move on from years of losses and scandals.

The firm reported a loss of $346 million in the third quarter, compared to a $1 billion profit in the same period a year ago. The bank's third-quarter loss was over 4 billion Swiss Francs, including taxes and restructuring costs.

Credit Suisse has been trying to turn around its fortunes for 166 years. Billions of dollars in trading losses, costly legal settlements and a revolving door of executive departures have made the bank go from crisis to crisis.

The bank has been affected by the fear of undiscovered financial land mines. It has fallen 45 percent so far this year due to rumors about its solvency. The stock price of Credit Suisse fell in Switzerland.

The Credit Suisse management team promised months ago to come up with a plan to make the company smaller and more financially prudent.

Mr. Krner said that this was a historic moment for the company. The investment bank is being restructured to make it simpler, more stable and with a focus on client needs.

The core private wealth unit represents more than a third of the company's revenue and manages more than $600 billion in assets.

The name of the American investment bank that Credit Suisse bought a few years ago is going to be revived as a new firm.

The leader of that new firm will be Michael S. Klein, a board member of Credit Suisse. The capital will be raised from outside investors.

Credit Suisse plans to put some of its riskiest assets and nonessential businesses, including its hedge fund lending unit and its operations in regions like Latin America, into a new division called a "bad bank."

A majority of the bank's securitized products group will be sold to investors led by Apollo Global Management and PIMCO. The transaction is expected to close by the summer of 2020.

Credit Suisse said it would cut costs by more than 2 billion dollars through layoffs and other measures. At the end of September, it had over 50,000 employees.

It plans to raise $4 billion by selling new shares to investors, which will be used to shore up its capital reserves, as well as more than $1 billion to the state-owned Saudi National Bank.

Thursday's earnings announcement underscored the importance of the restructure. Credit Suisse reported a loss due to weak performance in its investment bank and charges related to legal settlements in a New Jersey mortgage-bonds investigation and a French money-laundering case.

Credit Suisse's chief financial officer said that the outcome was not acceptable.