Saudi Arabia’s PIF halts Swiss financial market investments over Credit Suisse fallout

PIF, one of the world’s largest sovereign wealth funds, is reassessing its investment strategy amid growing concerns over regulatory stability and investor protection. Reuters
PIF, one of the world’s largest sovereign wealth funds, is reassessing its investment strategy amid growing concerns over regulatory stability and investor protection. Reuters
Short Url
Updated 21 May 2025
Follow

Saudi Arabia’s PIF halts Swiss financial market investments over Credit Suisse fallout

Saudi Arabia’s PIF halts Swiss financial market investments over Credit Suisse fallout
  • Decision driven by how Swiss regulators handled 2023 government-backed rescue of Credit Suisse by UBS Group
  • PIF continues to expand footprint across Europe, signaling redirection of capital

RIYADH: Saudi Arabia’s Public Investment Fund will no longer allocate capital to Switzerland’s financial markets, two years after suffering losses from the collapse of Credit Suisse.

During the FII PRIORITY Europe Summit in Albania, PIF Gov. Yasir Al-Rumayyan said that the decision was driven by the manner in which Swiss regulators handled the 2023 government-backed rescue of Credit Suisse by UBS Group, reported Bloomberg.

The abrupt deal was executed without shareholders’ approval, impacting investors across the Middle East.

PIF, one of the world’s largest sovereign wealth funds, is reassessing its investment strategy amid growing concerns over regulatory stability and investor protection.

The fund’s decision to halt investments in Switzerland’s financial markets marks a significant shift in its approach, underscoring the long-term impact of the 2023 Credit Suisse collapse on regional and institutional investor confidence.

PIF also continues to expand its footprint across Europe, signaling a redirection of capital.

“We’re not going to invest in the financial markets in Switzerland. If you change something overnight and wipe out all of your investors, this is a big red flag,” Al-Rumayyan said, as reported by Bloomberg.

The remarks were made during an on-stage discussion with Noel Quinn, newly appointed chairman of Zurich-based Julius Baer Group Ltd.

Quinn responded: “As the chairman of a Swiss bank as of 10 days ago, that concerns me.”

The 2023 acquisition of Credit Suisse was finalized rapidly following a sharp decline in its stock price.

The plunge became worse after the former chairman of the Saudi National Bank, Ammar Al-Khudairy, said the bank would “absolutely not” be open to further investments in Credit Suisse.

“The deal didn’t receive approval from either Credit Suisse or UBS shareholders as regulators and lawmakers rushed to contain a crisis of confidence that was spreading across global markets,” according to Bloomberg.




The 2023 acquisition of Credit Suisse was finalized rapidly following a sharp decline in its stock price. Shutterstock

At the time, shareholders from the Middle East, including SNB and the Qatar Investment Authority, collectively held around 20 percent of Credit Suisse.

SNB, which was the largest shareholder in the Swiss lender, had called on Credit Suisse to reject the offer from UBS, Bloomberg reported.

Other investors had cautioned that the Swiss government’s decision to override standard merger procedures and sideline shareholder votes could deter institutional investors.

Legal analysts also warned that the rushed nature of the transaction had undermined Switzerland’s standing as a reliable investment destination where the rule of law is safeguarded.

Al-Rumayyan’s remarks came as PIF announced plans to open a subsidiary office in Paris and committed to doubling its investments in Europe to $170 billion by the beginning of the next decade.

The fund has already deployed approximately $85 billion across the region between 2017 and 2024, making strategic investments in key European economies, including the UK, France, and Italy.


GCC banks post record $15.6bn profit in Q1 amid lending boom, stable forecast

GCC banks post record $15.6bn profit in Q1 amid lending boom, stable forecast
Updated 26 sec ago
Follow

GCC banks post record $15.6bn profit in Q1 amid lending boom, stable forecast

GCC banks post record $15.6bn profit in Q1 amid lending boom, stable forecast

RIYADH: Gulf Cooperation Council banks posted $15.6 billion in net profit for the first three months of 2025, a 7.1 percent rise from the previous quarter and the highest on record.   

According to a report by Kuwait-based Kamco Invest, the strong performance was supported by higher non-interest income, a sharp drop in loan impairments, and lower operating expenses. This came despite a decline in net interest income, which fell for the first time in eight quarters. 

The UAE posted the highest quarterly increase in net profit, with earnings rising by $639.6 million compared to the previous quarter, followed by gains in Saudi Arabia and Bahrain. 

On an annual basis, year-on-year growth was mixed across the region. While Saudi banks recorded a strong 17.2 percent increase in net income, banks in Qatar and Kuwait reported declines. 

Total revenues edged up just 0.04 percent to a record $34.6 billion, supported by resilient credit demand and a sharp decline in provisioning costs. 

According to the report, aggregate gross loans increased 3.6 percent, the fastest pace in 15 quarters, while customer deposits surged 5.1 percent to reach $2.65 trillion, underscoring continued liquidity strength across the region. 

However, interest earnings declined as the effects of rate cuts in the second half of 2024 began to take hold. Net interest income, the revenue banks earn from loans after subtracting what they pay on deposits, fell 1.7 percent to $22.8 billion. At the same time, the average yield on credit dropped to 4.16 percent, down from 4.21 percent. 

The latest performance underscores the GCC banking sector’s resilience following several years of strong credit expansion, supported by government-backed infrastructure projects, low credit defaults, and high liquidity buffers. 

Unlike banks in developed markets that have grappled with rising delinquencies and interest rate volatility, lenders in the Gulf have benefited from robust capitalization, prudent risk management, and steady non-oil economic growth. 

The combination of stable monetary policy, rising consumer and corporate demand, and state-led diversification initiatives continues to differentiate the region’s banking landscape, even as global financial conditions tighten. 

Saudi banks lead credit expansion  

Despite this decline, Saudi banks stood out for their substantial credit expansion. According to Kamco Invest, the Kingdom posted the region’s highest year-on-year loan growth in the first quarter. This growth was broad-based, covering sectors such as construction, real estate, education, and transportation. Outstanding credit facilities in the nation reached SR3.1 trillion, according to the Saudi Central Bank. 

Kamco also noted that Saudi banks reported one of the highest loan-to-deposit ratios in the GCC, at 95.5 percent, during the first quarter, underscoring aggressive lending activity relative to deposit mobilization. 

Current and savings account balances stood at $561 billion, accounting for 63.3 percent of total deposits, indicative of a strong, low-cost funding base. However, external analysts have raised caution over potential funding constraints. 

A recent report by Bloomberg highlighted the growing pressure on Saudi banks to sustain deposit growth amid a tightening liquidity environment. 

In the absence of further expansion in CASA deposits, Bloomberg consensus forecasts suggest that lending growth in the Kingdom may decelerate to between 11 and 12 percent in 2025, compared to an estimated 14 percent last year. 

While project finance and mortgage lending continue to support overall loan book growth, Bloomberg noted that corporate overdrafts and trade finance facilities have shown volatility over recent quarters. 

According to Kamco’s data, the region as a whole continues to show signs of balance sheet strength, with loan impairments falling by one-third to $2.1 billion. This drove the cost of risk down to 0.45 percent, among the lowest levels in recent years. 

Saudi banks recorded the lowest cost of risk at just 0.30 percent, benefiting from improved asset quality and a supportive economic environment. Operating expenses across the GCC also declined by 4.3 percent to $13.6 billion, helping maintain a cost-to-income ratio of 40 percent. 

GCC banks diversify income  

According to Kamco, return on equity remained strong across the board, averaging 13.6 percent for listed GCC banks. UAE banks posted the highest ROE at 16.6 percent, followed by Saudi Arabia at 13 percent and Qatar at 12.7 percent. However, net interest margins across the region dipped slightly to 3.10 percent from 3.14 percent due to the re-pricing of loans at lower rates. UAE banks retained the highest NIM at 3.34 percent. 

Even as interest income moderated, banks expanded their non-interest income, which included fees, commissions, and investment gains. Non-interest income rose 2.2 percent to $11.8 billion in the first quarter, led by UAE-listed banks with a 3.9 percent quarterly gain to $5.2 billion. 

According to the data presented in Kamco’s report, this rising contribution from non-interest income implies a gradual diversification of GCC banks’ revenue streams, helping offset margin compression and supporting profitability amid a more challenging interest rate backdrop. 

The performance of GCC banks stands in contrast to global banking trends, where high interest rates and tighter credit conditions have weighed on profitability. 

According to Kamco Invest, citing the International Monetary Fund, global credit risk is rising as borrowers face higher debt service burdens, with approximately $5.5 trillion in corporate debt maturing in 2024. 

This particularly affects the leveraged loan market, where default rates have increased. Meanwhile, Gulf banks benefit from strong capital buffers, low non-performing loan ratios, and government-backed infrastructure investments. The GCC-wide loan-to-deposit ratio eased slightly to 81.6 percent, indicating that most banks continue to hold more deposits than loans, providing a liquidity cushion. 

Kamco’s analysis also noted that central banks across the GCC largely maintained policy rates during the quarter, offering monetary stability amid global uncertainty. 

In Kuwait, total credit exceeded 50 billion Kuwaiti dinars for the first time, while Qatar saw its strongest loan growth in over two years, mainly due to lending to public entities and contractors. 

Looking ahead, rating agencies maintain a stable view of the region’s banking sector. Moody’s and Fitch Ratings expect profitability to remain solid in 2025, supported by strong capitalization, effective risk management, and continued non-oil economic expansion. 

The IMF forecasts gross domestic product growth of 3.5 percent across the GCC this year in 2025, with Saudi Arabia, the UAE, Qatar, and Bahrain driving momentum. S&P Global’s latest purchasing managers’ index data also points to robust private sector activity, with Saudi Arabia at 58.1 in March, the UAE at 54.0, and Qatar at 52.0 — all above the neutral 50 mark. 

With resilient lending activity, improving asset quality, and evolving income structures, GCC banks continue to show adaptability in the face of global uncertainty. As governments push ahead with diversification agendas and infrastructure investment, the banking sector is likely to remain a key engine of growth across the region.


Saudi Aramco sets indicative pricing for benchmark dollar bond sale

Saudi Aramco sets indicative pricing for benchmark dollar bond sale
Updated 27 May 2025
Follow

Saudi Aramco sets indicative pricing for benchmark dollar bond sale

Saudi Aramco sets indicative pricing for benchmark dollar bond sale

RIYADH: Saudi Aramco has launched the sale of a three-part, dollar-denominated bond, with tranches of 5-, 10- and 30-year maturities, fixed income news service IFR reported on Tuesday.

The oil giant set an indicative price for the 5-year tranche at 115 basis points over US Treasuries, while the 10-year and 30-year tranches carry initial price guidance of 130 bps and 185 bps respectively over US Treasuries, IFR reported.

The deal is expected to be priced later on Tuesday and will be of benchmark size, usually considered to be at least $500 million.

Citi, Goldman Sachs International, HSBC and JPMorgan are leading the transaction, with Abu Dhabi Commercial Bank, Bank of China, BofA Securities, Emirates NBD Capital, First Abu Dhabi Bank, Mizuho, MUFG, NATIXIS, Riyad Capital, SMBC, SNB Capital and Standard Chartered Bank acting as passive book-runners.


Turkish central bank gross reserves rose $7.5bn last week, traders and data say

Turkish central bank gross reserves rose $7.5bn last week, traders and data say
Updated 27 May 2025
Follow

Turkish central bank gross reserves rose $7.5bn last week, traders and data say

Turkish central bank gross reserves rose $7.5bn last week, traders and data say

ANKARA: Turkiye’s central bank bought more foreign currency last week, lifting its total reserves by a further $7.5 billion after sharp declines in March and April, bankers’ calculations from data showed on Tuesday.
Market turmoil in March over the detention and jailing of Istanbul Mayor Ekrem Imamoglu, who is President Tayyip Erdogan’s main political rival, triggered a policy pivot, including a hike in the bank’s key interest rate last month.
Bankers’ calculations, based on preliminary data, also showed that the central bank’s net reserves rose by $8 billion last week to $48 billion.
The central bank bought some $13 billion in the last three weeks, data showed, marking a reversal after it had sold some $57 billion to help stabilize the lira and other financial markets in the face of the turmoil.
Separately, overnight interest rates, which had dropped briefly to the main policy rate level of 46 percent on Friday, returned this week to 49 percent, at the upper band of the rate corridor that was also earlier raised to head off market turmoil.
Traders are closely monitoring whether overnight rates will hover close to the upper band of the rate corridor — 49 percent — in the coming days, for further signals on the policy path ahead.
Bankers have said that lowering overnight market rates would be a necessary step before the central bank resumes its easing cycle, which began in December but was reversed in April in the wake of the mayor’s arrest and jailing.
The bank’s next two scheduled policy meetings will be on June 19 and July 24.


Oil Updates — little changed as higher OPEC+ output expectations weigh on sentiment

Oil Updates — little changed as higher OPEC+ output expectations weigh on sentiment
Updated 27 May 2025
Follow

Oil Updates — little changed as higher OPEC+ output expectations weigh on sentiment

Oil Updates — little changed as higher OPEC+ output expectations weigh on sentiment

LONDON: Oil prices were little changed on Tuesday on increasing expectations members of the Organization of Petroleum Exporting Countries and their allies, known as OPEC+, will decide to increase their output at a meeting later this week.

Brent crude futures were up 11 cents, or 0.2 percent, at $64.85 a barrel by 9:40 a.m. Saudi time, while US West Texas Intermediate crude rose 6 cents, or 0.1 percent, to $61.59 a barrel. The WTI contract did not settle on Monday because of the US Memorial Day holiday.

“Crude oil edged lower as the market contemplated the outlook for rising OPEC supply,” Daniel Hynes, senior commodity strategist at ANZ, said in a note.

OPEC+ will likely finalize July output at their meeting, which sources have previously told Reuters will entail a production increase of 411,000 barrels per day.

Russian Deputy Prime Minister Alexander Novak said on Monday that OPEC+ had yet to discuss hiking output. The group is likely to finalize output quotas in an online ministerial meeting on May 28.

Eight OPEC+ members that had pledged additional voluntary cuts are now expected to meet on May 31, one day earlier than previously scheduled, three sources within the group told Reuters on Monday.

OPEC+ members had already agreed to accelerate oil output increases for a second month in June.

However, US President Donald Trump’s decision to extend trade talks with the European Union until July 9 alleviated immediate fears of tariffs that could suppress fuel demand.

Iran set the official selling price for its light crude oil grade for Asian buyers at $1.80 a barrel above the Oman/Dubai average for June, the state-owned National Iranian Oil Co. said. The price it set for May was a premium of $1.65.

Iranian President Masoud Pezeshkian said on Monday that Iran would be able to survive if negotiations with the US over its nuclear program fail to secure a deal.

If nuclear talks between the US and Iran fail, it could mean continued sanctions on Iran, which would limit Iranian supply and be supportive of oil prices. 


Closing Bell: Saudi main index closes higher, gains 76 points  

Closing Bell: Saudi main index closes higher, gains 76 points  
Updated 26 May 2025
Follow

Closing Bell: Saudi main index closes higher, gains 76 points  

Closing Bell: Saudi main index closes higher, gains 76 points  
  • MSCI Tadawul 30 Index climbed 14.22 points, or 1.01%, to 1,416.62
  • Parallel market Nomu fell 237.23 points, or 0.88%, to 26,780.54

RIYADH: Saudi Arabia’s Tadawul All Share Index closed higher on Monday, rising 76.18 points, or 0.69 percent, to finish at 11,075.96.

The total trading value on the main market reached SR4.32 billion ($1.1 billion).  

Despite the benchmark’s gain, market breadth leaned negative, with 70 stocks advancing while 171 declined.  

The MSCI Tadawul 30 Index climbed 14.22 points, or 1.01 percent, to 1,416.62.  

The parallel market, Nomu, however, ended in the red, falling 237.23 points, or 0.88 percent, to 26,780.54, with 36 stocks advancing and 59 declining.  

ACWA Power Co. led the session’s gainers on the main index, surging 9.96 percent to close at SR276.00, supported by trading turnover of SR192.89 million.  

Astra Industrial Group advanced 4.38 percent to SR157.20, followed by Saudi Industrial Investment Group, which gained 3.64 percent to SR15.38.  

Other notable risers included Dar Alarkan Real Estate Development Co., up 3.55 percent to SR20.44, and Jamjoom Pharmaceuticals Factory Co., which closed 3.13 percent higher at SR171.40.   

On the downside, Raoom Trading Co. recorded the steepest drop, falling 4.31 percent to SR68.90.  

Jabal Omar Development Co. declined 4.14 percent to SR22.70, while The National Co. for Glass Industries ended 4.03 percent lower at SR44.10.  

SHL Finance Co. dropped 4.03 percent to SR18.56, and National Metal Manufacturing and Casting Co. slipped 3.90 percent to SR13.32.  

On the announcement front, Arabian Pipes Co. signed a contract with Saudi Aramco valued at approximately SR104 million for the manufacturing and supply of steel pipes.   

The agreement, signed on May 26, will span nine months and is expected to impact financial results in the fourth quarter of 2025 and the first quarter of 2026.   

Despite the news, shares of Arabian Pipes closed 1.03 percent lower at SR8.62.   

Meanwhile, United Carton Industries Co. is set to debut on the main market on May 27 following the completion of its SR600 million IPO.   

The final offer price was set at SR50 per share, giving the packaging firm an implied market capitalization of SR2 billion at listing. It marks the sixth listing on Tadawul so far this year.