Qatar doubles Credit Suisse stake

The logo of Credit Suisse Group on Monday, January 16, 2023 in Davos, Switzerland.

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Qatar Investment Authority Is is the second largest shareholder in credit Suisse That’s after nearly doubling its stake in the troubled Swiss lender late last year, according to a filing with the US Securities and Exchange Commission.

QIA – Qatar’s Sovereign Wealth Fund – initially began investing in Credit Suisse at the time of the financial crisis. Now, it owns 6.8% of the bank’s shares, according to the filing Friday, second only to 9.9% stake bought by Saudi National Bank as part of last year’s $4.2 billion Raising capital for massive strategic overhaul,

Eikon data indicates that nearly a fifth of the company’s stock is now owned by Middle Eastern investors, with 3.15% owned by Saudi-based family firm Olayan Financing Co.

Credit Suisse will report its fourth-quarter and full-year earnings on February 9, and is Damage has already been estimated at 1.5 billion Swiss francs ($1.6 billion). For the fourth quarter as a result of the ongoing restructuring. The shake-up is designed to address persistent underperformance and a series of risk and compliance failures at the investment bank.

CEO Ulrich Korner told CNBC at the World Economic Forum in Davos In the last week that the bank is making progress on the transformation and has seen a significant reduction in the outflow of customers.

CEO says Credit Suisse is making really good progress

The injection of investment from the Middle East comes in the form of major US investors Harris Associates and Artisan Partners selling their shares in Credit Suisse. Harris remains the third largest shareholder at 5%, but has cut its stake significantly over the past year, while Artisan has completely sold its position.

‘final axle’

Earlier this month, Deutsche Bank resumed its coverage of Credit Suisse with a “Hold” rating, noting that the strategy update announced in October and the subsequent rights issue in December move the group towards “more stable, higher growth, higher return, higher multiple businesses”. Final Pivot”. ,

CEO of Swiss pension fund foundation says he is 'not convinced' by Credit Suisse's restructuring

“While in our view the strategically correct measures announced on a large scale, the execution of the group’s transformation requires time to reduce costs, regain operational momentum as well as reduce complexity funding costs .. Therefore, we expect lower profitability, even less than its potential, in 2025,” said Benjamin Gooy, head of European financial research at Deutsche Bank.

As such, he said Credit Suisse’s valuation “isn’t going to be cheap on an earnings basis anytime soon.”

‘More art than science’

Central to Credit Suisse’s new strategy is a spin-off of its investment bank to form CS First Boston, which will be led by former Credit Suisse board member Michael Klein.

In a note earlier this month, barclays Amit Goel, co-head of equity research at European banks, characterized Credit Suisse’s earnings estimates as “more art than science”, arguing that details on earnings contributions coming out of businesses remain limited.

“For Q422, we will focus on whether losses are coming (the underlying losses in the quarter reach c.CHF1.1bn), whether there are any signs of stabilization in the business, and if there are restructuring But there’s more detail,” he said.

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