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Tuesday, July 27, 2021

QIA trims Credit Suisse stakes following scandals

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The reduction in stakes now means that the Qatar Investment Authority may no longer be Credit Suisse’s largest stakeholder. 

The Qatar Investment Authority (QIA) has trimmed its stake in Swiss global investment bank and financial services firm Credit Suisse Group AG to below 5%, Bloomberg reported.

A series of recent scandals has left Credit Suisse in turmoil, making it the worst-performing major bank stock in Europe.

QIA now holds about 128 million shares, amounting to a 4.8% in stakes, according to a filing with the Securities and Exchange Commission on Wednesday. This would mark the first reduction by QIA since 2010, according to Bloomberg data.

The authority previously held about 133 million shares, making it the Swiss bank’s previous biggest and longest-term shareholder.

QIA is one of the world’s largest sovereign funds with assets estimated to be worth more than $360 billion by data platform Global SWF.

Credit Suisse damages

Credit Suisse has been hit by a series of scandals, namely the twin scandals concerning the failures of assets company Archegos Capital Management and financial services company Greensill Capital, which caused billions of dollars in losses and further damages to Credit Suisse’s reputation.

Credit Suisse has been bearing the brunt of one difficult situation after another in the past few years. The latest comes as the firm attempted to recover from the damage of a spying scandal that lead to the exit of Chief Executive Officer Tidjane Thiam in 2020.

2021 saw the fall of Greensill’s supply-chain finance empire. The financial services company was a key partner for Credit Suisse’s asset management business.

Read also: Ahli Bank eyes debt sale to raise $500 million

In March, Greensill filed for insolvency, as it found itself unable to repay a $140 million loan to Credit Suisse and was “hit by defaults” from the businesses group GFG Alliance, one of its main customers.

Bloomberg has reported that Qatar’s former prime minister, Sheikh Hamad bin Jassim Al Thani, stands to take a personal hit from Credit Suisse’s burdens.

“Vehicles linked to him invested about $200 million in funds the bank ran with Greensill, people familiar with the matter said earlier this year,” the Bloomberg report said.

In April, Credit Suisse reported losses of $4.7 billion due to its involvement with Archegos Capital, the US-based family office that came undone when shares fell and it couldn’t meet margin calls from several global investment banks, including the Swiss firm.


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