Qatar Investment Authority began investing in Credit Suisse during the 2007-2008 global financial crisis.
The Swiss UBS bank is seeking to complete the acquisition of Credit Suisse, as Switzerland’s largest bank gets ready to execute its rescue merger with its nearest domestic rival.
The latest developments comes after the bank reported a merger first quarter net profit of $1 billion this year. UBS’s first quarter net profit was predicted by analysts surveyed by the Swiss financial newswire AWP to come in at roughly $1.7 billion, down from $2.1 billion a year ago.
Over the same time period, however, the bank did witness large capital inflows, which reflects client confidence, Qatar News Agency reported.
“Our solid underlying performance and strong inflows this quarter demonstrate that we continue to be a source of stability for our clients during periods of significant uncertainty,” UBS Group CEO Sergio P. Ermotti said in a statement.
However, a slew of scandals involving the Swiss investment bank, together with the failure of Silicon Valley Bank and Signature Bank in the US, have raised fears that the world’s banking system could collapse during the worst financial crisis since 2008.
Ammar Al-Khudairy, the head of the Saudi National Bank, aggravated an already bad situation in March by answering a question from Bloomberg TV about whether the bank would expand its share in Credit Suisse, according to reports.
“The answer is absolutely not, for many reasons outside the simplest reason, which is regulatory and statutory,” he said.
Despite the fact that Al-Khudiary’s views were “fairly consistent with what the bank had said in October,” the interview reportedly caused investor fear, resulting in a 24% decline in shares of Credit Suisse, according to Market Watch.
Nearly a month of this predicament, Ermotti said, regarding the potential merger: “I am convinced that this transaction will help to reinforce the leading position of the Swiss financial center and will be of benefit to the entire economy. The combined firm presents a unique opportunity to generate significant, long-term value to all of our stakeholders,” as quoted by QNA.
Tuesday morning trading on the Swiss stock exchange saw a decline in UBS shares. In mid-morning trade, shares were down 3.9%, trading for 17.48 Swiss francs each, reports detailed.
The Qatar Investment Authority doubled its stakes in the Swiss bank in January, reaching just below 7%. This move granted it the second-largest shareholder within the the entity after the Saudi National Bank, which is the largest bank in kingdom.
The Saudi National Bank invested $1.5 billion for a 9.9% stake in Credit Suisse less than seven months ago. Since purchasing a 9,9% stake in Credit Suisse last year, SNB has lost $1 billion on its investment.