Qatar Accumulating Shares in Credit Suisse, Prime Minister Says

Qatar Accumulating Shares in Credit Suisse, Prime Minister Says

Feb. 18 (Bloomberg) -- Qatar is accumulating shares in Credit Suisse Group and plans to spend as much as $15 billion on European and U.S. bank stocks over the next year, the Gulf state's prime minister said in an interview.

``We have a relation with Credit Suisse and we bought some of the stock from the market, actually, but I cannot say what percentage because still we are in the process,'' Sheikh Hamad bin Jasim bin Jaber al-Thani, who is also chief executive officer of the Qatar Investment Authority, said in an interview late yesterday in Doha.

Persian Gulf sovereign wealth funds, whose coffers are swelling with near-record oil prices, have been snapping up stakes in banks with balance sheets that have been battered by U.S. subprime mortgage losses.

Credit Suisse on Feb. 12 said fourth-quarter profit fell 72 percent after writedowns of 1.3 billion Swiss francs ($1.2 billion) on debt and leveraged loans. Brady Dougan, chief executive officer of Switzerland's second-biggest bank, scaled back risky investments before the debt-market slump that forced UBS AG, Switzerland's biggest bank, to take a $14 billion charge.

Sovereign wealth funds have recently made investments in Citigroup Inc., Merrill Lynch & Co., Morgan Stanley, and UBS. Wall Street banks have raised $59 billion, mostly from investors in the Middle East and Asia. Citigroup alone was propped up in November by a $7.5 billion investment from the Abu Dhabi Investment Authority, the world's richest sovereign fund, after losing almost half its market value.

Greater Scrutiny

The growing dependence of U.S. banks on sovereign wealth funds has fed calls in the U.S. for greater scrutiny of the investments. Asked about these concerns, particularly those being aired in Washington, Sheikh Hamad said he was surprised by the resistance and that the idea is to help financial institutions.

``The sovereign fund is from friendly countries, especially this region. They have no political ambitions. They are looking to invest their wealth for the people of these countries,'' he said in an interview with Bloomberg Television before attending the opening of the Brookings Doha Center, a project of the Saban Center for Middle East Policy based at the Brookings Institution in Washington.

The West and the Persian Gulf have been investing in each other's economies for many years, he noted. Because of high oil prices, ``I think it's wise to invest it. So I'm surprised for the concern. I know they should have some kind of transparency, which we have,'' he said.

With a population of less than 1 million, Qatar owns the world's third-biggest natural gas reserves and 1.3 percent of global crude oil-reserves, generating surpluses for investment by the investment authority. It manages $60 billion for the state, Citigroup analysts including Carsten Stendevad estimated in an October report.

Sheikh Hamad also announced Qatar is creating $1 billion funds in Finland and Malaysia similar to the fund Qatar's Investment Authority announced in December that it was starting with Indonesia.

``We did this with some Europeans like Finland. We are doing a billion dollar fund with them. And we will do with Malaysia.'' The Malaysian fund ``will be around a billion,'' he said.

BLOOMBERG