Qatar's sovereign wealth fund is the Swiss bank's biggest shareholder. A prominent member of the ruling family also reportedly lost money in a $10.1 billion supply chain fund blow-up.
The Zurich-based bank owes Sheikh Hamad bin Jassim Al Thani a lot: he ran Qatar's state fund QIA during the financial crisis when it stepped in to shore up Credit Suisse. The QIA remains the Swiss bank's largest shareholder, with a 5.2 percent stake.
Credit Suisse has an awkward way of repaying that loyalty: al Thani put roughly $200 million into the Swiss bank's Greensill supply chain funds via various vehicles, «Bloomberg» reported on Wednesday. It isn't clear how much al Thani lost when Credit Suisse abruptly pulled the plug on the funds, which led Greensill, starved of the Swiss bank's financing, to collapse.
Agonizing Choice
A member of the wealthy and powerful ruling clan, al Thani was Qatar's prime minister until 2013 and is a major investor in London real estate. He fits the picture of a super-wealthy client – these make for the lion's share of the 1,000 clients who bought the Greensill funds.
Credit Suisse now faces the agonizing choice of whether to offer compensation to them or play hardball on claims. The latter option may antagonize clients like al Thani – and appears more likely, finews.com reported on Wednesday.
Total Damage Unknown
Until now, Credit Suisse has returned roughly $3.1 billion to the fund investors, largely from skimming their cash. The bank admitted its damage is manifold: «The ultimate cost to the group of resolving these matters may be material to its operating results,» according to Credit Suisse's annual report.
Credit Suisse's hard-line follows the thinking that its fund investors were qualified – or savvy and well-informed enough – to make a judgment about their suitability, as well as wealthy enough to splurge on them even if it resulted in losses, as CEO Thomas Gottstein said on Wednesday while conceding that «it still hurts».
Long-Standing Close Ties
The al-Thanis as well as Qatar maintain close ties to Credit Suisse, which paid the emirate 380 million Swiss francs ($406 million) every year in coupons on the crisis-era injection until redeeming the instruments three years ago.
The QIA and the Swiss bank also launched a private markets platform with Credit Suisse credit star John Popp last September, alongside Aventicum, a nine-year-old tie-up in Doha.
The al Thanis had taken a board seat at Credit Suisse in the wake of the financial crisis of 2008/09, but their representative exited four years ago. Some members of the family also own Quintet, a Luxembourg-based group of upstart private banks including Merck Finck in Germany and Brown Shipley in the U.K.
