The Swiss bank is starting on a share repurchase program which could lower its shareholder capital by as much as 5 percent.
The Zurich-based bank will on Monday start a share buyback of as many as 129.8 million of its own shares, it said in a statement on Friday. That translates to a volume of 1.5 billion Swiss francs ($1.53), or roughly 5.08 percent of its capital.
The program, which runs through year-end, couldn't be timed better: Credit Suisse's stock has largely failed to respond to a successful clean-up of the bank under CEO Tidjane Thiam: the shares are down nearly 40 percent in the past year, compared to a 29 percent drop in the Stoxx 600 European bank index.
Paying Out Profits
Credit Suisse expects to buyback at least 1 billion francs, depending on market conditions. The bank plans to cancel the bought-back shares in order to lower its share capital, a move it disclosed at a December investor day. Credit Suisse plans a similar repurchase for next year.
The move is part of a capital pledge by Credit Suisse Chairman Urs Rohner to treat shareholders better. Among other things, the bank has abandoned the scrip dividends of the past in favor of all-cash payouts, and bolstered its payout ratio to more than 50 percent of profits, provided it can maintain capital targets.
