Credit Suisse predicted a surprise fourth-quarter pre-tax loss of up to $1.6 billion as the beleaguered bank undertakes a radical overhaul, sending stocks tumbling again on Wednesday. Shaken by repeated scandals, Switzerland’s second-biggest bank unveiled a rejig in late October but accepted its accounts would take a hit of up to 1.5 billion Swiss francs ($1.6 billion) in the final three months of the year. At an extraordinary general meeting, shareholders approved capital increases worth around four billion Swiss francs in order to fund the restructuring plan. Chairman Axel Lehmann called it an “important step in our journey to build the new Credit Suisse”. “This vote confirms confidence in the strategy, as we presented it in October, and we are fully focused on delivering our strategic priorities to lay the foundation for future profitable growth,” he said. The increase in share capital is expected to boost Credit Suisse’s CET1 ratio, which compares a bank’s capital to its risk-weighted assets. At 1200 GMT, the group’s shares were down 4.8 percent at 3.67 Swiss francs, while the Swiss stock exchange’s main SMI index was up 0.2 percent. The bank suffered a net loss of 273 million Swiss francs in the first quarter, then nearly 1.6 million in the second quarter and four billion in the third. The scale of fourth-quarter losses “will depend on a number of factors including the investment bank’s performance for the remainder of the quarter, the continued exit of non-core positions, any goodwill impairments, and the outcome of certain other actions, including potential real-estate sales”, the Zurich-based bank said in a statement. Credit Suisse said in October that it expected to incur restructuring charges and software and property impairments of around 250 million Swiss francs in the fourth quarter as part of its overhaul. The bank’s reorganisation is aimed at dramatically reducing the scale of its investment bank, in a bid to repair the damage following a series of scandals. In addition to revamping its investment banking unit, the announced measures include slashing 9,000 jobs and a capital injection from the Saudi National Bank. However, the restructuring takes place in an unfavourable context for the banking sector. Its investment bank suffered the backlash of the “substantial industry-wide slowdown” in capital markets and reduced activity in the sales and trading markets, it said. “The bank expects these market conditions to continue in the coming months.” Andreas Venditti, an analyst at Swiss investment managers Vontobel, said the “massive net outflows” in wealth management — the bank’s core business alongside its Swiss domestic banking — “are deeply concerning — even more so as they have not yet reversed. “Credit Suisse needs to restore trust as fast as possible — but that is easier said than done.” Flora Bocahut, an analyst at the US investment bank Jefferies, added: “Today’s update confirms our concerns that the Credit Suisse ship is yet to stabilise, and it’ll get worse before it potentially gets better.” Credit Suisse’s capital-guzzling investment banking arm has been the source of heavy losses which plunged its accounts into the red — eclipsing its more stable activities such as wealth management or its Swiss domestic banking services. Credit Suisse’s investment bank suffered a loss of 3.7 billion Swiss francs in 2021 and backed that up with a 992 million Swiss franc loss in the first half of 2022. It was hit by the implosion of US fund Archegos, which cost Credit Suisse more than $5 billion. Meanwhile its asset management branch was rocked by the bankruptcy of British financial firm Greensill, in which some $10 billion had been committed through four funds. Credit Suisse is one of 30 banks globally deemed too big to fail, forcing it to set aside more cash to weather a crisis. While many industry experts think a bankruptcy highly improbable, these rumours helped drag its share price down to a low of 3.158 Swiss francs on October 3.