According to media reports, Credit Suisse is preparing to sell parts of its fund business and is looking for fresh money in the Middle East. Finews.com examines the plausibility of these rumors.
Credit Suisse is rumored to have been approached by at least one sovereign wealth fund in the Middle East for a capital injection, according to a «Reuters» report citing people familiar with the matter. No further details were given.
Credit Suisse declined to comment to finews.com as well, reiterating it will comment on October 27 when it reveals the results of the strategy review in conjunction with its third-quarter results.
The bank will need money to implement such a strategy with analysts putting the price tag between $4 billion to $9 billion by 2024. Shareholders reacted with horror to rumors of a new capital increase, while the bank's management seems reluctant to take such a measure because of the current low prices of Credit Suisse shares.
Middle East Relations
To be sure, the bank has traditionally enjoyed excellent relations with the Middle East. The Qatari sovereign wealth fund QIA and Saudi conglomerate Olayan, are major shareholders. According to reports, also participated in last year's capital injection. It would be almost criminal if Credit Suisse management did not play this trump card in the current emergency, so the rumor appears plausible.
Meanwhile, «Bloomberg» (behind paywall) reported Credit Suisse had begun selling its American fund business. Investors are interested in the business, the report said without giving specifics. Credit Suisse declined to comment on the matter.
Greensill Debacle
The sale of the Credit Suisse fund business has been the subject of speculation for years. Before the debacle surrounding the closed Credit Suisse Greensill funds in March 2021, the bank's asset management (CSAM) business had proven to be very profitable, but never reached critical mass.
Precisely because of the protracted Greensill scandal, any plans to sell the division are considered to be blocked. The bank is taking legal action in the US to recover the Greensill funds. And there is another case underway in an Australian court. This rumor seems implausible.
