Credit Suisse targets Middle East capitals ‎

A source said Credit Suisse has approached at least one sovereign wealth fund in the Middle East for an injection of capital, while some funds view the scandal-hit Swiss bank’s activities as potential investment opportunities.

According to “Reuters”, Bloomberg reported that Abu Dhabi and Saudi Arabia are studying, through their sovereign wealth funds, whether they will inject money into the Credit Suisse investment bank and other activities of the bank. She said the investment would be to take advantage of low valuations.

A source familiar with the situation said Christian Meissner, head of investment banking at Credit Suisse, will leave the bank once it announces a strategic reform on October 27.

It was not possible to know the size of the potential target capital and its other details.

A Credit Suisse spokesperson declined to comment, and confirmed that the bank will address the developments of its strategic review when it announces third-quarter results.

Credit Suisse, one of the largest banks in Europe, is trying to recover from a series of scandals such as the loss of more than five billion dollars from the collapse of the investment company Archegos last year, when it was also forced to suspend client funds linked to the bankrupt financier Grensell.

Analysts said the group may need up to nine billion Swiss francs ($9 billion), some of which may have to be obtained from investors and some from selling assets.

A source familiar with the matter said it has already begun a process to sell its US asset management arm. Bloomberg News, which first reported the news on Monday, said the unit is expected to attract interest from private equity firms.

Credit Suisse’s approach to raising capital indicates that the sale of assets alone may not be enough to cover the costs of the impending reform that the bank hopes will put an end to heavy losses and a series of scandals.

On Monday, the Swiss lender agreed to pay $495 million to settle a lawsuit related to mortgage-related investments in the United States, in addition to the billions it pays to solve legal cases related to activity in residential mortgage-backed securities in the lead-up to the financial crisis in 2008.

In June, Credit Suisse was found guilty of failing to prevent money laundering by a Bulgarian cocaine smuggling ring, and a Bermuda court ruled that a former Georgian prime minister and his family were owed more than half a billion dollars in damages from the bank’s local life insurance arm.