Credit Suisse denied that ties to major shareholder Qatar are jeopardizing its chances of clinching a banking license in Saudi Arabia. Tidjane Thiam personally appeared in Riyadh to drop the paperwork.
The Zurich-based bank has applied for a bank license in Saudi Arabia to bolster its business with the kingdom's wealthy, CEO Tidjane Thiam confirmed on Tuesday. He also denied a journalist's assertion that the Swiss bank's major shareholder, the emirate of Qatar, was causing a delay to the process.
«There is no issue for Credit Suisse in Saudi Arabia», Thiam said at a media briefing on Tuesday. The CEO said he personally had traveled to Riyadh to submit the application for a banking license, and that he had met with the head of the Saudi Arabia Monetary Authority, which is Ahmed Abdulkarim Alkholifey.
A wide-sweeping anti-corruption campaign by the crown prince behind the kingdom's throne would seem to put Switzerland's banks and officials into a dicey position. But in February, Swiss bankers joined a government-led delegation to Saudi Arabia (it isn't known whether Thiam was part of that trip).
Redeeming Qatar Paper
Credit Suisse is eager to bulk up in Saudi Arabia and bank the kingdom's oil-rich wealthy. This comes as Credit Suisse begins dismantling some ties with Qatar, currently politically very at odds with Saudi Arabia.
The Swiss bank plans to call, or redeem early 6 billion in contingent convertible instruments it issued to Qatar in 2012 and 2013 to replenish its capital, Credit Suisse finance chief David Mathers said.
Credit Suisse pays Qatar a juicy 9 percent and 9.5 percent coupon on two instruments, respectively. This translates to an automatic 380 million francs ($383.2 million) for the emirate every year. The redemption as well as other measures will knock 700 million francs off Credit Suisse's funding costs from next year, Mathers said.
