Day After Deutsche Bank Admits Not All Is Well, Swiss Giant Credit Suisse Also Admits It Needs More Cash

Tyler Durden's picture

Not everything is "fine" in the land of European banks, in fact quite the opposite.

One day after Deutsche Bank warned of a massive $7 billion loss and the potential elimination of the bank's dividend which had been a German staple since reunification, a move which many said was a "kitchen sinking" of the bank's problems (but not Goldman, which said it was "not a kitchen sinking, but a sign of the magnitude of the challenge" adding that "this development confirms our view that the task facing new management is very demanding. Litigation issues do not end with this mark down – we expect them to persist for a multi-year period. We do not see this as a "clean up" but rather an indication of what the "fixing" of Deutsche Bank will entail over the 2015-18 period), it was the turn of Switzerland's second biggest bank after UBS, Credit Suisse, to admit it too needs more cash when moments ago the FT reported that the bank is "preparing to launch a substantial capital raising" when the new CEO Thiam unveils his strategic plan for the bank in two weeks’ time.

FT adds that "while not specifying an amount, they pointed to a poll published last week by analysts at Goldman Sachs concluding that 91 per cent of investors expect the Swiss bank to raise more than SFr5bn in new equity."

The stock price did not like it, although just like with DB, we expect the "story" to quickly become that the Swiss bank is putting all its dirty laundry to rest, so an equity dilution is actually quite positive. Incidentally, with DB stock green on the day following a dividend cut, perhaps it would go limit up if Deutsche Bank had announced a negative dividend?

The official narrative is well-known: the bank does not need the funds, it is simply a precaution ahead of new, more stringent capital requirements:

The capital is likely to be used to absorb losses triggered by a faster restructuring of the Swiss group, the people said. But Credit Suisse will also need higher capital ratios to comply with toughening demands from regulators.

 

The Swiss authorities are expected to announce an increase of minimum capital ratios over the coming months, which could prove more challenging for the bank than its better capitalised local rival, UBS. Credit Suisse’s common equity tier one capital ratio of 10.3 per cent compares with UBS’s 13.5 per cent

The real reason, of course, has nothing to do with this, and everything to do with the collapse of manipulation cartels involving Liebor, FX, commodities, bonds, equities, gold, and so on, because when banks can no longer collude with each other to push markets in any given direction, that's when they start losing money. That and, of course, the fact that central bank intervention in capital markets has made it virtually impossible to trade any more. Or as they call it, "miss capital ratios."

Expect many more such announcements in the coming weeks.

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Arnold's picture

Gee Willikers!

NoDebt's picture

<contagion>

What was that?  Did you hear that?  I thought I heard something.

NoVa's picture

Miss Capital

Ms. Capital

 

so in today's politically correct world, what is the correct title?

Dead Canary's picture

WOW! You coulda knocked ME over with the weather.

Losses. Gosh!

Bay of Pigs's picture

Doesn't appear to matter to their stock. Down one whole percent! Maybe they should try to lose even moar money?

Deutsche Bank AG (DB)   28.44 0.35(1.22%)

 

two hoots's picture

The Foreign Bank Supervision Enhancement Act of 1991 (FBSEA) switched this responsibility to the Federal Reserve. As a result, the Federal Reserve "generally" (why is that word even here? my add) must examine foreign bank branches and agencies annually. Examiners assess branches and agencies based on their Risk management, Operational controls, Compliance, and Asset quality, or ROCA for short. In addition, the Federal Reserve assesses parent banks' financial conditions to ensure that the banks can manage and support their U.S. branches and agencies effectively. In response to the increasing sophistication and diversity of banks' financial practices, examiners pay particular attention to the risk management practices and controls of both domestic and foreign banks.

"If" ("" my add) the Federal Reserve or other banking supervisors find that a banking institution has problems with compliance, or engages in unsound banking practices, they may take various measures to address the problems. In less serious cases, supervisors usually take informal action, such as requiring letters of commitment from the problem institution. In more serious cases, however, a range of legal measures may be taken, varying in severity. In the most serious cases, the U.S. activities of a foreign banking institution can be terminated, and the institution can be expelled from the United States.

 

http://www.ny.frb.org/aboutthefed/fedpoint/fed26.html

 

 

  

 

So, how are they doing?

StychoKiller's picture

I'm thinking it's the sound of Govt. printing presses ramping up to plaid!

Moar Munny in circulation than ever before, yet banks don't have enough!

OpTwoMistic's picture

Pay  3 percent on deposits and the money will flood in.  Wait... this is the old way.

two hoots's picture

 

They must make loans of 5-7% to give us 3%.  Never Happen, again.

 

OpTwoMistic's picture

It would only take one large bank to break ranks to start a flood.

Beowulf55's picture

Must be dumping their silver hoard..........

LawsofPhysics's picture

When you produce nothing of real value and do not perform any real work, you will eventually go out of business.

Of course, in this case it is much worse, considering the ongoing FRAUD.

Go ahead, start the bail-ins so we can start taking fucking heads!!!!

GeezerGeek's picture
Credit Suisse Also Admits It Needs More Cash

So do I. Anyone willing to contribute?

LawsofPhysics's picture

^^^this.  I would sooner bail-out a good carpenter before bailing out another fucking banker/financier.

tarabel's picture

 

 

I got a hundred buvks. Okay, I can borrow it, but, in return, I need you to help me out a little on this bond issue I'm floating.

Mark Mywords's picture
Mark Mywords (not verified) williambanzai7 Oct 8, 2015 9:19 AM

Fabulous. That's a keeper.

Great job as usual.

Johnny_is_already_taken's picture

ECB will just print more money

gwar5's picture

Heard on the street.....

"Ima leave all my money in the bank where it's safe!"  -- Ms. Nada Kluheer, street interviewee.

yrad's picture

"You expect us to turn an honest profit?!? Either allow us to commit open fraud, skim our billions, or prepare for the consequences."

I would respect DB more if they simply released this statement.

NoDebt's picture

Later, as the NWO progresses in it's agenda, I feel quite certain you will start to hear statements like that.  

yrad's picture

It would be refreshing. I can take the fraud, it's a worn out gig. I cant take how stupid they think we are.

Glass Seagull's picture

 

 

Starting to feel like late '07 / early '08 news flow coming out of US banks.

FWIW

Ouagadoudou's picture

And Deutsh Bank is up 1.5% as we speak ....

SheepDog-One's picture

Yes banksters we CAN hear you now.....moar moneez comin right up as you order!

CHoward's picture

They can always sell GirlScout cookies or maybe mow some lawns, shovel snow in the winters, whatever - always ways to earn some extra cash when needed. 

toady's picture

The day after DB says they're a few billion short and will cut/drop dividends it's stock shoots up?

Wall street must assume moar is coming... plus they get the dividend money.

SheepDog-One's picture

The overlords in Israel will fix it all and make stawks go up, surely!

whoopsing's picture

Indigestable MBS....this is gonna be a puke - fest !

orangegeek's picture

LMFAO!!! 

 

If CS and DB stop buying fucking shares in AAPL and AMZN, maybe they'd have some folding money.

 

Enjoy the ride CS/DB - FUCKERS!!!

Lucky Leprachaun's picture

If they offered a meaninful rate on deposits they'd get in all the money they need.

Ban KKiller's picture

Gee, makes a feller feel sort of sorry for those sister fucking chumps. Ok, not even close. 

Buy back more stock? Change FASB rules again? Reset the value of their "assets" much, much higher? Bribe more regulators? Check! 

Big_bear's picture

in 2008, LEH, BSC, and CFC were going up as bad news was coming out .. "kitchen sink" "cleaning house" "purge the bad" were common phrases in MM .. we know what happened next ..

TeethVillage88s's picture

Credit Suisse Group AG,Credit Suisse Group AG*,,,,,,,
Ticker,CSGN VX Equity,,,,,,,
Includes Loans to:,"Credit Suisse/New York NY, Credit Suisse/New York NY, Credit Suisse Securities USA LLC, Credit Suisse Securities USA LLC and Credit Suisse Securities USA LLC",,,,,,,
Identified in Fed Documents as:,"CREDIT SUISSE NY, CREDIT SUISSE NY BR, Credit Suisse Securities (USA) LLC, Credit Suisse Securities (USA) LLC and Credit Suisse Securities (USA) LLC",,,,,,,
Capital Raised From Home Governments,$0.00 ,,,,,,,
Programs,"AMLF, TAF, PDCF, TSLF, ST OMO",,,,,,,
Country,Switzerland,,,,,,,
Industry,Banking,,,,,,,
"Average Daily Balance
From 8/1/2007 to 4/30/2010","$13,330.29 ",,,,,,,
Peak Amount of Debt,"$60,800.00 ",,,,,,,
Peak Date,8/27/2008,,,,,,,
Number of Days In Debt to the Fed,386,Market Cap,Percent of Market Cap,ST OMO,TSLF,PDCF,TAF,AMLF

- TAF - Temporary Auction Facility
- ST OMO - Single Tranch Open Market Operations
- TSLF - Term Securities Lending Facility, a weekly loan facility that promoted liquidity in Treasury and other collateral markets
- PDCF - Primary Dealer Credit Facility, created in March 2008 as an overnight loan facility that provided funding to primary dealers