Credit Suisse is seeking to raise roughly 1.8 billion Swiss francs ($2 billion) from investors to strengthen its balance sheet as losses mount from the collapse of hedge fund Archegos Capital Management.
The Swiss bank said in a statement that it would sell convertible notes to shareholders on Thursday to raise the capital.
Losses stemming from Archegos' collapse wiped out what would have been a strong quarter, with revenues climbing 31% over the same period last year. Credit Suisse reported a loss of 757 million Swiss francs ($827 million) for the January-March period.
The bank took a hit of 4.4 billion Swiss francs ($4.8 billion) from Archegos' implosion in the first quarter, and said it expects to book an additional 600 million Swiss francs ($655 million) in losses later this year.
“The loss we report this quarter, because of this matter, is unacceptable,” CEO Thomas Gottstein said in the statement.
Credit Suisse announced earlier this month that its top investment banker, Brian Chin, and chief risk officer Lara Warner would both be leaving the bank. Other members of the executive board will not receive bonuses for 2020, and board chairman Urs Rohner will give up 1.5 million Swiss francs ($1.6 million) in compensation.
Archegos is the second major stumble for Credit Suisse in recent months.
In March, Credit Suisse froze $10 billion in investment funds connected to failed UK supply chain finance firm Greensill Capital, which provided cash advances to companies owed money by customers.
Credit Suisse clients invested in the funds could suffer considerable losses.
Switzerland’s financial regulator, Finma, said in a statement on Thursday that it was investigating Credit Suisse for potential risk management shortcomings in relation to Archegos and Greensill.
The regulator said it has ordered various short-term measures be put in place, including “risk-reducing measures and capital surcharges,” as well as reductions or suspensions of bonuses.