Saudi Arabian and Qatari investors were the ones who lost the most money in the aftermath of the unprecedented crisis at Swiss bank Credit Suisse that eventually resulted in the bank's takeover by UBS.
Saudi Arabian state wealth fund and Saudi National Bank were some of the biggest investors in the Swiss bank, while Qatar has been pumping pterodollars into the Swiss bank for more than a decade.
Saudi National Bank Loses Over $1 Billion
According to a Wall Street Journal estimate, in one of the latest transactions, Saudi National Bank had made a $1.5 billion investment in Credit Suisse last year. As Credit Suisse bit the dust last week and taken over by UBS, all this investment has come to naught.
The major bank in Saudi Arabia had built up just less than 10 percent stake in Credit Suisse at the time of the bank's crash. Saudi National Bank wanted to keep its stake at levels below 10 percent to avoid regulatory complications. This was the reason why the Saudi National Bank refused further investment in Credit Suisse earlier this month. Reports that the Saudis were no longer willing to underwrite the wobbly Swiss bank was one of the factors that accentuated the fall of the legendary Swiss institution.
No Impact on Business, Says SNB
However, Saudi National Bank has explained that the losses it suffered in the Credit Suisse investment would not affect its business as those investments were accounted for only a small fraction of its enormous cash pile.
"As at December 2022, SNB's investment in Credit Suisse constituted less than 0.5% of SNB's total Assets, and c. 1.7% of SNB's investments portfolio ... Changes in the valuation of SNB's investment in Credit Suisse have no impact on SNB's growth plans and forward looking 2023 guidance," Saudi National Bank said.
Saudi Olayan Conglomerate Has 3% Stake in Credit Suisse
According to a Reuters report, the Olayan group, which is headquartered in Lichtenstein, owns a stake of about 3 percent in Credit Suisse. The Olayan conglomerate is controlled by some of the wealthiest people in Saudi Arabia.
Qatar Stake Worth More Than $3 Billion
Apart from Saudi investors, Qatari investors too were burned by the collapse of Credit Suisse. According to the WSJ report, Qatar has been building a strong position in Credit Suisse ever since the banking crisis of 2008. Billions of dollars were pumped into the Swiss bank, and the worth of the Qatari stake at that time was estimated to be more than $3 billion.
Again, the Qatari state and the Olayan family invested another $6.2 billion into Credit Suisse in 2011, according to the WSJ report.
QIA Holds Nearly 7% Stake
According to CNBC report, the Qatar Investment Authority holds a 6.8% stake in Credit Suisse. As late as in January 2023, the Qatar Investment Authority (QIA) raised its stake in the Swiss bank. According to Reuters, QIA bought 139.03 million shares in the Swiss lender, increasing its stake in the bank to nearly 7 percent.
Norway Sovereign Wealth Fund Another Investor
Scandal-hit Credit Suisse, which suffered huge losses owing largely due to the mismanagement of credit risk, was easing down the slippery slope for years. In December 2022, it made a dire move of raising about $4 billion in funding from investors to help it stay afloat. Most of the funding in this round came from the Gulf investors. While some of the Gulf region's strongest wealth funds like Saudi National Bank, the Qatar Investment Authority and the Saudi Olayan Group. generously invested in Credit Suisse. Another major investor was Norway's sovereign wealth fund, Norges Bank Investment Management.