(Bloomberg) -- Credit Suisse Group AG Chief Executive Officer Tidjane Thiam said hedge funds are wrong to assume that the Swiss lender will have to raise additional capital after the shares touched a fresh all-time low last week, according to two people with knowledge of the matter.

The lender’s share price is hurt by “an unusually high level of short positions,” Thiam wrote in a memo to staff last week, the people said, asking not to be identified because the contents are private. While some hedge funds are speculating on another capital increase, partly because of restructuring measures and operational losses, they’re “not correct,” Thiam wrote.

Thiam, 53, has struggled to restore profitability and reverse a drop in shares, which has eroded about half the company’s market value since he took over in July. As part of his overhaul announced last year, the CEO raised 6 billion Swiss francs ($6.3 billion), while seeking to eliminate thousands of jobs and cutting back the securities unit to focus on wealth management.

Credit Suisse shares have lost about 42 percent this year, touching the lowest since at least 1989 on June 16, data compiled by Bloomberg show. The slide has left them the sixth-worst performers on the 39-member Bloomberg Europe Banks and Financial Services Index, which slipped 21 percent.

Short interest on Friday accounted for almost 13 percent of outstanding shares of Credit Suisse ADRs, up from 9 percent at the end of May, indicating rising interest from hedge funds and others seeking to profit from a potential decline in the stock, according to data from Markit Ltd.

Credit Suisse’s risk-weighted capital ratio, a measure of financial strength, remained at 11.4 percent in the first quarter from the previous three months, even as it posted a loss for the period. At Swiss rival UBS Group AG, led by Sergio Ermotti, that capital ratio was 14 percent at the end of March.

Thiam plans to visit clients and investors next month, with a focus on New York, London and Singapore, the people said, citing the memo. A spokeswoman in Zurich declined to comment.

--With assistance from Nishant Kumar To contact the reporters on this story: Jeffrey Vögeli in Zurich at, Neil Weinberg in New York at To contact the editors responsible for this story: Simone Meier at, Neil Callanan

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