RBR seeks Saudi royal family investment for Credit Suisse, says source

Activist investor RBR Capital Advisors has offered to connect Credit Suisse with the Saudi royal family as potential major shareholders for the Swiss bank, a person familiar with the matter told Reuters.

The Swiss hedge fund led by Rudolf Bohli, which has a stake in Credit Suisse, last month pushed for a break up of the bank into three parts, hoping to double its market value. The fund in October disclosed a roughly 0.2 per cent stake in Credit Suisse.

Switzerland’s second biggest bank is two years into a restructuring under CEO Tidjane Thiam, who is aiming to boost profitability by concentrating more on wealth management and less on volatile investment banking.

In late October, Bohli offered to put Thiam in touch with a representative of the Saudi royal family, the person said.

Thiam’s reaction had been polite but cool, the person added.

In discussions with Thiam, the hedge fund manager had suggested Credit Suisse could play a more prominent role in the Middle East with a key shareholder such as the Saudi crown, the person with direct knowledge of the matter said.

RBR declined to comment on the matter. The Saudi royal family did not respond to a request for immediate comment.

Saudi Arabia’s Crown Prince Mohammed bin Salman in early November began a crackdown on corruption in the country’s political and business elite, which has included arrests of royals, businessmen and ministers.

 

Sovereign wealth funds

In an interview in October, Bohli told Reuters he was in contact with 150 investors, including sovereign wealth funds. Most of these investors were not Credit Suisse shareholders, he said.

According to the person, Bohli offered to introduce Thiam to a representative of the royal family named Rashad Janahi.

Janahi, who formerly managed the Abu Dhabi Investment House, now known as Infra Capital Investments, could not be reached for immediate comment.

Reuters could not independently verify Janahi’s connections to the Saudi royal family.

Credit Suisse said last week it had not been approached by any Saudi sovereign wealth funds about becoming investors after a Financial Times column suggested Saudi Arabian investors could be interested in taking a stake.

The paper did not provide a source for its information.

Several sovereign wealth funds in the Gulf region hold investments in some European banks. Abu Dhabi’s Mubadala Investment Co. has a stake in Italian bank UniCredit and Swiss private bank Falcon via its Aabar Investments division, for example.

Credit Suisse has cited Saudi Arabia as a very important market and is applying for an on-shore banking licence with the aim of expanding its business there.

Privately held Saudi investment conglomerate Olayan Financing Company holds a 4.9 per cent in Credit Suisse, according to the bank’s information. This places Olayan, along with Harris Associates and Qatar’s sovereign wealth fund, amongst its biggest shareholders.

The Swiss bank’s turnaround plan is nearing the final year. The plan has undergone several adjustments, including a paring back of profitability targets, since they were first established in 2015. Its aim to focus the bank more on wealth management and less on investment banking has included several thousand job cuts in Switzerland, London and New York.

Credit Suisse shares, which have underperformed the European banking sector index, have fallen in value by nearly two-thirds from a high above 27 Swiss francs ($27.58) in late July 2015 to a low of 9.4 francs in July 2016. They have since recovered to trade above 16 francs per share.