Saudi Arabia’s PIF to Shun Swiss Financial Markets After Credit Suisse

(Bloomberg) — Two years after it was left nursing losses from the rapid collapse of Credit Suisse, the head of Saudi Arabia’s Public Investment Fund said it will no longer invest in Switzerland’s financial markets.

Middle Eastern investors were hit particularly hard by Switzerland’s abrupt decision to bypass investor votes when UBS Group AG took over Credit Suisse in a government-backed rescue at a steep discount. At the time, Saudi National Bank — whose top shareholder is the PIF — held a stake of about 10% in Credit Suisse.

“We’re not going to invest in the financial markets in Switzerland,” PIF Governor Yasir Al Rumayyan said an event in Albania on Saturday. “If you change something overnight and wipe out all of your investors, this is a big red flag.”  

Al Rumayyan made the comments as part of an on-stage conversation with Noel Quinn, who recently took over as chairman of Zurich-based Julius Baer Group Ltd. “As the chairman of a Swiss bank as of 10 days ago, that concerns me,” Quinn said in response.

The 2023 deal to rescue Credit Suisse was pulled together in days after a selloff in the bank’s shares was intensified when then Saudi National Bank Chairman Ammar Al Khudairy said he’d “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.

At the time, Middle Eastern shareholders including Saudi National Bank and the Qatar Investment Authority owned about a fifth of Credit Suisse. Saudi National Bank — the Swiss bank’s largest shareholder — had urged Credit Suisse to reject the UBS offer, Bloomberg News reported previously.

Other investors warned back then that the government’s decision to override merger laws on shareholder votes risked scaring off institutional investors. Legal commentators also said the manner in which the sale was rushed through tarnished the country’s reputation as a place where the rule of law is guaranteed for investors.

Al Rumayyan’s comments came as the PIF unveiled broader plans to open a subsidiary office in Paris and pledged to double investments in Europe to $170 billion by the start of the next decade. The fund deployed about $85 billion across the region between 2017 and 2024, after making key investments in countries including the UK, France and Italy. 

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