Credit Suisse pares back investment banking, sharpens focus on rich

Credit Suisse pares back investment banking, sharpens focus on rich
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Updated 04 November 2021

Credit Suisse pares back investment banking, sharpens focus on rich

Credit Suisse pares back investment banking, sharpens focus on rich
  • It will simplify its structure into four divisions - investment bank, Swiss bank and asset management, in addition to wealth management

Credit Suisse will pare back its investment bank and focus on building its wealthy client base, the Swiss bank said on Thursday, as it regroups following a string of scandals.


The bank will shutter much of its prime broking business that dealt with hedge funds such as failed investment outfit Archegos, instead ploughing an additional 3 billion Swiss francs ($3.3 billion) into its private bank for the wealthy, which will be centralised into one global business.


"Risk management will be at the core of our actions, helping to foster a culture that reinforces the importance of accountability and responsibility," said chairman Antonio Horta-Osorio.


Over the past year, Credit Suisse has been fined for arranging a fraudulent loan to Mozambique, tarnished by its involvement with defunct financier Greensill, racked up $5.5 billion in losses when Archegos collapsed, and has been rebuked by regulators for spying on executives.


That cast a cloud over the bank, prompted an exodus of key staff and fuelled speculation the group, whose stock price has languished, could even be bought by a rival.


The bank posted a 21% fall in third quarter profit and said it expected to report a net loss in the fourth quarter as it writes off its investment bank-related goodwill for a one-off charge of around 1.6 billion Swiss francs.


Credit Suisse plans to hire 500 more private bankers over the next three years, with the aim of having 1.1 trillion Swiss francs of assets under management by 2024 compared with 0.9 trillion currently.


It will simplify its structure into four divisions - investment bank, Swiss bank and asset management, in addition to wealth management, and four geographic regions - Europe, Middle East and Africa (EMEA), Asia-Pacific, Americas and Switzerland.


Thursday's announcement is the first step on a road to reining in the bank being chartered by Horta-Osorio, who took over in April as the bank grappled with the fallout of reckless earmarking.


The bank's drive to centralise its operations is drawing on lessons from some of its recent failures, including Archegos.


Earlier this year, Credit Suisse published a report blaming a focus on maximizing short-term profits and enabling "voracious risk-taking" by Archegos for failing to steer the bank away from catastrophe.


The slimmed down investment bank will focus on advising companies on deals and listings, and trading cash equities and other products that are of interest to its private banking clients.

It will cut back its emerging market lending, structured derivatives and other "non-core" market businesses as well as prime broking.


Despite long-running discussions about Archegos - by far the bank's largest hedge fund client - Credit Suisse's top management were apparently unaware of the risks it was taking.


The bank's chief risk officer and the head of its investment bank recall hearing about it first only on the eve of the fund's collapse.


Credit Suisse's financial humiliation stands in stark contrast to its cross-town rival UBS.


In the wake of massive losses and a bailout during the financial crisis, UBS successfully pivoted away from investment banking to wealth management and is now the world's largest wealth manager with $3.2 trillion in invested assets - roughly three times that of Credit Suisse. 


Saudi SABIC, ExxonMobil begin operations of petrochemical JV on US Gulf Coast

Saudi SABIC, ExxonMobil begin operations of petrochemical JV on US Gulf Coast
Updated 20 January 2022

Saudi SABIC, ExxonMobil begin operations of petrochemical JV on US Gulf Coast

Saudi SABIC, ExxonMobil begin operations of petrochemical JV on US Gulf Coast

RIYADH: Riyadh-based Saudi Basic Industries, also known as SABIC, one of the leading petrochemical firms worldwide, announced the start of operations of its petrochemical joint venture with US ExxonMobil.

US Texas is to witness the launch of an ethylene production unit – operating an annual capacity of around 1.8 million tons, the homegrown petrochemical company said in a statement.

The new production unit, which started construction in 2019, will produce materials to be utilized in packaging, agricultural film, construction materials, clothing, and automotive coolants.

This project is in line with SABIC’s strategy, aimed at diversifying its feedstock as well as strengthening its position in North America.

“This is a remarkable achievement that positions us well to help meet growing global demand for performance products while providing meaningful investment in the US Gulf Coast,’ president of ExxonMobil Karen McKee said, commenting on the partnership.

SABIC noted that the deal’s financial impact is expected to roll out on the company’s financial statements during the ongoing quarter.

In the latest trading session, shares of the company edged down by 0.2 percent to close at SR126 ($33.6).


Mastercard, Coinbase partner to make NFTs more accessible

Mastercard, Coinbase partner to make NFTs more accessible
Updated 20 January 2022

Mastercard, Coinbase partner to make NFTs more accessible

Mastercard, Coinbase partner to make NFTs more accessible

RIYADH: Payments giant Mastercard has partnered with cryptocurrency exchange Coinbase to make non-fungible tokens more accessible.

Mastercards can be used to make purchases on Coinbase’s upcoming NFT marketplace.

“We’re excited to announce today that we’re partnering with Coinbase to let people use their Mastercard cards to make purchases on Coinbase’s upcoming NFT marketplace,” Mastercard said in a statement.

“Getting more people involved safely and securely is perhaps the best way to help the NFT market thrive.”

Mastercard also sees greater potential for core NFT technology to go beyond art and collectibles in many other areas.

Coinbase announced in October last year that it is launching an NFT marketplace.

“Coinbase NFT, as a peer-to-peer marketplace that will make minting, purchasing, showcasing and discovering NFTs easier than ever,” Coinbase said.

“We’re making NFTs more accessible by building user-friendly interfaces that put the complexity behind the scenes. We’re adding social features that open new avenues for conversation and discovery. And we’re going to grow the creator community exponentially, a win for artists and for fans.” 


Saudi Wafrah appoints Khaled Saleh Al Amoudi as CEO

Saudi Wafrah appoints Khaled Saleh Al Amoudi as CEO
Updated 20 January 2022

Saudi Wafrah appoints Khaled Saleh Al Amoudi as CEO

Saudi Wafrah appoints Khaled Saleh Al Amoudi as CEO

RIYADH: Saudi food firm Wafrah for Industry and Developments has appointed Khaled Saleh Al Amoudi as CEO on Thursday, according to a bourse statement. 

The decision follows recommendation from the Remuneration and Nomination Committee.

With a M.Sc.in Financial Management, Al Amoudi currently holds the chief financial officer position at the firm, with more than 20 years of accumulated experience as CFO and in the governmental and bank sectors.


Tadawul approves $755m government debt listing

Tadawul approves $755m government debt listing
Updated 20 January 2022

Tadawul approves $755m government debt listing

Tadawul approves $755m government debt listing

RIYADH: Saudi stock exchange Tadawul approved listing of SR2.83 billion ($755 million) worth of government debt instruments, submitted by the Ministry of Finance, according to a bourse filing.

The first issuance dated January 8, amounts to SR1.25 billion, Tadawul said in a statement.

The second issuance dated January 12, is valued at SR1.59 billion.


Profits of Saudi-based SADAFCO drop 28.6% as pandemic hits sales

Profits of Saudi-based SADAFCO drop 28.6% as pandemic hits sales
Updated 20 January 2022

Profits of Saudi-based SADAFCO drop 28.6% as pandemic hits sales

Profits of Saudi-based SADAFCO drop 28.6% as pandemic hits sales

RIYADH: Saudia Dairy and Foodstuff Co., or SADAFCO, reported a 28.6 percent decline in profit during the nine months ending Dec. 31, 2021. 

Profits dropped to SR146 million ($38.9million), compared to SR205 million in the corresponding period a year earlier, the company announced in a bourse statement.

SADAFCO attributed the lower profit figures to lower sales volumes driven by the pandemic, an increase from 5 percent to 15 percent in VAT, and higher material and logistics costs.

The financial statements of the company indicated a healthy cash flow, with a strong cash position of SR679 million.

SADACFO’s share price edged down by 0.12 percent in today’s session to close at SR167.

Earlier, the company’s board recommended cash dividends at SR3 per share for the first half of the fiscal year ended Mar. 31, 2022.

Jeddah-based SADAFCO operates sales and distribution depots in 24 locations across Saudi Arabia, Bahrain, Qatar, Jordan, and Kuwait. Its products are also exported to several countries in the MENA region.