Credit Suisse shares are a 'steal,' say new Saudi backers after taking sizeable stake

The president of 1 of Credit Suisse's newest and biggest shareholders called connected the beleaguered slope to present a swift overhaul and instrumentality to a "very stable, blimpish Swiss banking posture."

Saudi National Bank, the kingdom's largest lender and majority-owned by the Saudi government, announced Wednesday that it was investing up to $1.5 cardinal successful Credit Suisse — representing a involvement of up to 9.9%.

"We got it astatine the level price. I deliberation the slope has been battered," Ammar Alkhudairy told CNBC's Hadley Gamble connected Sunday. "It's trading astatine little than a 4th of publication value, of tangible publication value, which is, which is simply a steal. And it's 160-year-old brand, the marque has a batch of value." The slope is reportedly acceptable to go the second-largest shareholder of Credit Suisse, 2nd to Harris Associates.

The Swiss lender posted a third-quarter nett loss of 4.034 cardinal Swiss francs ($4.09 billion) past week,  significantly worse than expert estimates, and announced a monolithic strategical overhaul. Shares are down astir 55% this twelvemonth aft respective scandals, absorption changes and anemic net releases.

In the anticipated strategical shift, the slope vowed to "radically restructure" its concern limb to importantly chopped its vulnerability to risk-weighted assets, which are utilized to find a bank's superior requirements. It besides aims to chopped its outgo basal by 15%, oregon 2.5 cardinal Swiss francs, by 2025.

The SNB president cited Credit Suisse's concern banking portion arsenic the Achilles' bottommost of the company, accentuated by the existent clime of accrued marketplace volatility.

"The biggest overhang for Credit Suisse, implicit the past mates of years ... has been the volatility of the show of their concern bank," helium told CNBC.

Alkhudairy added that the bank's different 3 halfway businesses, which is the retail concern successful Switzerland, the backstage wealthiness absorption and plus absorption are "very stable" concern streams that person delivered "predictable, sustainable returns."

"So it's conscionable moving backmost into a precise stable, blimpish Swiss banking posture, which we like," helium said.

In the abbreviated to medium-term outlook, Alkhudairy said helium feels that the astir important measurement for Credit Suisse to undertake is to "get the volatile concern retired of the quarterly earnings," and absorption connected backstage wealthiness absorption and augment the retail business.

"I conscionable would impulse them not to blink, not to hesitate and conscionable execute [the overhaul]. The quicker the better," helium said.

However, erstwhile asked astir the determination by SNB to put successful the embattled Swiss bank, Alkhudairy denied that it was needfully related to PIF, but alternatively an concern that was a "manifestation of the caller Saudi Arabia."

He added that Saudi National Bank does not person immoderate committee seats astatine Credit Suisse currently, and helium doesn't spot that changing successful the future.

"We volition enactment the slope arsenic a sizable shareholder," said Alkhudairy. "There is nary volition successful immoderate mode to interfere successful the management, oregon enactment successful the management."

"Let maine fto maine beryllium clear, this is simply a fiscal investment, the 9.9% was precise good measured, due to the fact that erstwhile you get to 10%, you person each kinds of regulatory and accounting issues that that creep up, which we felt we would not privation to get into. We don't person immoderate committee seats for now, and we don't spot america taking a committee spot directly," helium said.