Credit Suisse's investment bank draws interest from Saudi crown prince: WSJ

BENGALURU – Investors including Saudi Arabia’s Crown Prince and a US private-equity firm run by a former Barclays chief executive have shown interest in investing US$1 billion (S$1.35 billion) or more in Credit Suisse’s new investment banking unit, the Wall Street Journal reported on Sunday.

Crown Prince Mohammed bin Salman is considering an investment of around US$500 million to back the new unit CS First Boston (CSFB) and its CEO-designate Michael Klein, the report said, adding that bank has not yet received a formal proposal from any Saudi entity.

Additional financial backing could come from US investors including former Barclays chief Bob Diamond’s Atlas Merchant Capital, the report said, citing sources familiar with the matter.

Credit Suisse did not immediately respond to a request for comment.

Seeking to restore vigor to a business that has been languishing, Credit Suisse in October said that

it will reshape its investment bank

by resurrecting the First Boston brand. The bank tapped board member Klein to lead CSFB.

Saudi National Bank (SNB), controlled by the government of Saudi Arabia, had earlier pledged to

invest up to 1.5 billion Swiss francs (S$2.16 billion) in Credit Suisse

itself for a stake of up to 9.9 per cent, and said it may back the standalone CSFB which will operate as an independent capital markets and advisory bank headquartered in New York.

Credit Suisse’s history with the First Boston brand dates to 1978 when the pair linked up to operate in the London bond market. They later merged to create CS First Boston, but a tough period followed after famed bankers departed and the firm ran into regulatory troubles.

Some bankers and investors have expressed scepticism over its ability to regain its past glory in a shrinking market. REUTERS