Global rating agency Moody’s Investors Service expected Credit Suisse to record $3 billion of losses by the end of this year, potentially bringing its core capital below the key 13% level.
The Swiss bank stated in July that it expected to operate with a common equity tier 1 ratio of between 13-14% for the rest of 2022.
Credit Suisse reported a loss of 1.9 billion francs ($1.92 billion) for its financial statement in the first half of 2022 in which the rating agency forecast that further losses will come in the second half.
The three billion dollars of losses this year will indicate that the bank’s common equity tier 1 would fall slightly below 13% as the rating company noted that it would be “credit negative” for the Swiss bank.
Moody’s revised rating on Credit Suisse down in August and has been on a negative outlook ever since as the Swiss bank
Several mistakes in these past few years that caused the company to lose billions of dollars, including the bankruptcy of Greensill and Archegos scandal, had led the share price of the bank to plunge as much as 56% this year in which the speculation of the bank going bankrupt has returned.To avoid filing for bankruptcy, the Swiss bank is preparing to announce its strategic plan that the company said will include potential divestitures and asset sales on October 27, 2022.