Saudi National Bank Was Denied A 40% Stake In Credit Suisse

The Saudi National Bank had expressed interest in increasing its stake in Credit Suisse from 9.88% to 40%. However, the bank was barred from making the purchase by the Swiss financial market regulator, FINMA.

Saudi National Bank was denied a 40% stake in Credit Suisse

Reports have said that the Saudi National Bank was denied approval to increase its stake in the troubled Swiss lender. Credit Suisse was the second-largest bank in Switzerland before its collapse, triggering anxiety across the Swiss and global financial markets.

Credit Suisse was later acquired by UBS at a low price of three billion Swiss francs, equivalent to around $3.4 billion, on March 19. The purchase deal was brokered by Swiss authorities in a bid to ensure that the woes surrounding Credit Suisse did not spill over to the rest of the financial industry.

The Saudi National Bank wanted to have a 40% stake in Credit Suisse, but the purchase deal was blocked by FINMA. FINMA is a regulatory body that needs to give its approval before a foreign investor can take a stake of over 10% in any leading Swiss bank.

The reason why FINMA opposed this purchase deal remains unclear. If the deal had materialized, it would have led to the Saudi National Bank injecting $5 billion into the Swiss lender. Before this deal, Saudi National Bank was already the largest shareholder in the Swiss bank.

UBS completes the emergency takeover of Credit Suisse

UBS closed an emergency takeover deal for the embattled local rival known as Credit Suisse in June. The takeover deal led to the creation of a Swiss banking and wealth and management giant. The deal resulted in a $1.6 trillion balance sheet.

The deal has been seen as the largest banking deal since the 2008 global financial crisis. The Chief Executive at Credit Suisse, Sergio Ermotti, and the Chairman, Colm Kelleher, have said that despite the challenges resulting from this deal, there were many opportunities for the customers, shareholders, and employees in Switzerland.

The combined entity has $5 trillion worth of assets. The deal led to UBS having a top position across crucial markets. The takeover also saw Credit Suisse ending the 167 years that it had spent as an independent entity.

Prior to the deal, the shares at Credit Suisse were dealt a major blow following multiple losses and scandals at the bank in recent years. With this takeover deal, the two banks have an employee base of around 120,000 people globally. UBS has also said that it will trim jobs to lower costs and leverage synergies.

UBS announced a series of management changes following this deal. Some of these changes were at Credit Suisse AG, which now runs as a UBS subsidiary. The division is now being operated as an independent entity. Part of the leadership team at the newly merged company will come from Credit Suisse.