Informed sources said that the Kingdom of Saudi Arabia and Abu Dhabi are studying whether to inject money into the investment bank. for the Credit Suisse group. And other companies to take advantage of declining values.
Two sources, who declined to be named because the talks are private, said Riyadh and Abu Dhabi were separately considering potential investments through sovereign wealth funds such as Abu Dhabi’s Mubadala Investment Company and Saudi Arabia’s Public Investment Fund. They said that the deal might also come through other tools in which each country owns large stakes, according to a report published by Bloomberg Agency and seen by Al Arabiya Net.
The deliberations are at an early stage, and it is not clear whether they will result in confirmed offers. They said potential investors are concerned regarding the risks of future losses or legal issues.
Credit Suisse shares have fallen more than the banking index, having lost regarding half their value this year.
The bank has less than two weeks to reveal the details of the latest restructuring, including a possible separation between the advisory and leveraged finance business. One of the sources said that potential investment in this entity has been discussed at the highest levels of government in Abu Dhabi.
“We will disclose the latest findings regarding our comprehensive strategy review when we report third-quarter earnings. It would be premature to comment on any potential results before then,” Credit Suisse said in a statement. The media office in Abu Dhabi and the Public Investment Fund of Saudi Arabia did not immediately have representatives for comment. Mubadala declined to comment.
Bloomberg reported earlier this month that the bank is seeking to bring in an outside investor to inject money into part of its advisory and investment banking business.
Separating the deal-making and underwriting unit would effectively split the troubled investment banking division into three parts, with Credit Suisse maintaining a shrinking trading unit while shedding its portfolio of securitized products and other assets it wants to dispose of.
As part of the changes, head of investment banking Christian Messner is set to leave in the coming weeks, and his departure is likely to be announced along with other steps on October 27, people familiar with the matter said earlier.
Credit Suisse has long relied on wealthy Middle Eastern investors as its major shareholders, including the Qatar Investment Authority and Saudi Arabia’s Olayan Group. They have invested often in times of need, including the Qatar Investment Authority’s participation in the issuance of nearly $2 billion in Credit Suisse convertible bonds in April 2021. This helped bolster the balance sheet following the collapse of one of its major clients, a fund ” Archigos Money Management.
