Report: Abu Dhabi, Saudi Arabia may invest in Credit Suisse, others amid depressed values

On Monday, a report by Bloomberg citing various people with knowledge of the matter claimed that Abu Dhabi and Saudi Arabia are looking to invest in Credit Suisse Group AG’s investment bank and other businesses amid depressed values. While the talks are in the early stages, sources said, the potential investors are already being cautious regarding the risk of future losses or legal issues. 

The sources have asked to remain anonymous since the talks are private, said the report. Meanwhile, the two countries are supposedly looking through sovereign wealth funds like Abu Dhabi’s Mubadala Investment Co. and Saudi Arabia’s Public Investment Fund. However, the deal may also come through other places where the countries own high stakes, said the sources. 

This comes ahead of the bank’s announcement regarding the latest restructuring which is expected to take place in less than two weeks and also includes potential separation from its advisory and leveraged finance business. In a previous report, Bloomberg said that the bank has sought outside investment for this venture. This is the entity that Abu Dhabi’s highest levels of government could potentially invest in, said the report citing sources. 

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The report also noted how this separation of the dealmaking and underwriting unit would let Credit Suisse break from the troubled investment banking division into three pieces while keeping the smaller trading unit and breaking off its securitized products group and other assets that it wants to offload. 

Earlier this month, sources also elucidated how an outside investment for the new unit could help the bank lessen the cost of “retaining and attracting talent for a business that is almost entirely driven by key rainmaker’ relationships.” 

Meanwhile, Credit Suisse in a statement said that they are in the midst of a comprehensive strategic review and will give an update on its progress when they announce its third-quarter earnings. “It would be premature to comment on any potential outcomes before then,”, the statement added. On the other hand, the representatives from the two countries have declined to comment, the report indicated. 

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This comes amid the company’s shares rising as much as 8.7% in New York trading and 4.1% in Zurich, having lost at least of its value this year. Furthermore, the report citing anonymous sources also indicated the departure of investment banking head Christian Meissner as a part of the upcoming restructuring of the company which may be announced around October 27. 

However, this would not be the first time as Credit Suisse has a history of relying on wealthy middle eastern investments as top shareholders like Qatar Investment Authority and Saudi Arabia’s Olayan Group which have invested in times of need, said the report. In 2021, the QIA was reportedly a part of the bank’s at least $2 billion convertible notes issuance. 

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