Saudi crown prince, US private equity firm interested in Credit Suisse

101
2
Saudi crown prince, US private equity firm interested in Credit Suisse

The Wall Street Journal reported on Sunday that investors such as Saudi Arabia's crown prince and a US private equity firm run by a former Barclays CEO have shown interest in investing $1 billion or more in Credit Suisse's new investment banking unit.

Crown Prince Mohammed bin Salman is considering investing around $500 million to back the new unit CS First Boston CSFB and its CEO-designate Michael Klein, the report said. The bank has not yet received a formal proposal from any Saudi entity.

The report said that U.S. investors, including former Barclays Chief Bob Diamond's Atlas Merchant Capital, could get more financial backing, citing people familiar with the matter.

Credit Suisse did not respond immediately to a request for comment.

In October, Credit Suisse said that it will reshape its investment bank by re-establishing the First Boston brand, in order to restore vigor to a business that has been languishing. Klein was tapped by the bank to lead the CSFB.

Saudi National Bank SNB, controlled by the government of Saudi Arabia, has pledged to invest up to 1.5 billion Swiss francs and $1.60 billion in Credit Suisse for a stake of up to 9.9%, and said it may back the standalone CSFB, which will operate as an independent capital markets and advisory bank in New York.

Credit Suisse's history with the First Boston brand dates back to 1978 when they were linked up to operate in the London bond market. They later merged to create CS First Boston, but a tough period followed after the famed bankers left and the firm ran into regulatory problems.

Some bankers and investors have expressed scepticism about its ability to regain its past glory in a shrinking market.