LONDON â€" Credit Suisse reported a 63 percent decline in net profit in the third quarter on Thursday after taking a charge related to the value of its debt.
The Zurich-based bank is bolstering its capital reserves after Switzerland's central bank raised concerns earlier this year that the bank may not have cash to weather future financial problems.
In response, Credit Suisse has announced a 15.3 billion Swiss franc, or $16.4 billion, capital-raising plan, which involves tapping existing shareholders for new investments and the sale of financial assets.
Credit Suisse said on Thursday that its net income totaled 254 million Swiss francs in the three months through Sept. 30, compared to 683 million francs in the same period last year.
An accounting charge related to the value of the bank's debt totaled 1.05 billion francs, according to a company statement.
“We have realigned our business to better meet the demands of a changed regulatory and m arket environment,†the bank's chief executive, Brady W. Dougan, said in a statement. “We have further strengthened our capital base and have improved our balance sheet structure to meet future regulatory requirements.â€
As part of its plans to raise new capital, Credit Suisse said that it had increased its reserves by 12.8 billion francs by the end of the third quarter. The bank's core Tier 1 ratio, a measure of ability to weather financial shocks, stood at 14.7 percent under the regulatory rules known as Basel II.5. That compares to 10 percent in the similar quarter in 2011.
The Swiss bank also announced plans to reduce its balance sheet by around 13 percent, or 130 billion francs, by the end of next year. Credit Suisse said it would find additional cost savings of a combined 1 billion francs by 2015, as it continues to streamline its operations and focus on its lucrative wealth management business. The bank's total expected cost savings now have reached 4 billion francs, which includes previously announced job losses of 3,500.
Credit Suisse's private banking operations reported a 233 percent rise in pretax profit, to 689 million francs, while its investment banking unit also returned to profitability on strong fixed income sales and advisory services. Pretax profit in the investment banking division in the three months through Sept. 30 totaled 508 million francs compared to a 720 million loss in the similar period last year. The bank does not provide net profit figures for its individual operations.
