The Global bank Credit Suisse seeks help from Saudi Arabia after approaching bankruptcy
International media, citing unnamed sources, reported that the Credit Suisse Group contacted at least one sovereign wealth fund in the Middle East in order to inject capital.
So far it’s not possible to know the size and other details of the potential capital injection.
Bloomberg reported that Abu Dhabi and Saudi Arabia are studying, through their sovereign wealth funds, whether to inject money into the investment bank Credit Suisse and other commercial activities, in order to take advantage of the bank’s low valuations.
Analysts have estimated that the bank may need as much as 9 billion Swiss francs ($9 billion) as part of the reorganization, some of which may come from investors and some from selling assets.
A source familiar with the matter said the company has already begun a sale of its US asset management arm, with initial offers due to expire at the end of this week.
While Credit Suisse’s approach to raising capital suggests that selling assets alone may not be enough to cover the costs of an impending fix, which the embattled bank hopes will put an end to heavy losses and the recent string of scandals.
The Financial Times, citing informed sources, said that Credit Suisse is preparing to sell parts of its Swiss local bank as it tries to close a capital hole of about 4.5 billion Swiss francs ($4.48 billion).
“We’ll update the progress of our comprehensive strategy review when we announce third-quarter earnings,” Credit Suisse told Reuters in an emailed statement.
According to reports, the bank has made plans to split its investment bank into three, as it tries to emerge from three years of relentless scandals.
The Credit Suisse group faces a capital shortfall of up to $8 billion by 2024 according to estimates by analysts at Goldman Sachs, as the group needs a deep restructuring.
