Credit Suisse’s share price shot up on reports that a Saudi Arabian prince and US private-equity firm are looking to invest upward of US$1bn into its new investment bank.
Having moved to spin off its First Boston brand, which could separate the bank from losses and legal issues, Credit Suisse has seen interest from prince Mohammed bin Salman and former Barclays PLC (LSE:BARC) chief executive Bob Diamond, according to the Wall Street Journal.
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Credit Suisse plans to separate its investment bank operation as part of restructuring in an effort to stem crippling losses and end a wave of scandals and disastrous investments.
“We are radically restructuring the investment bank to help create a new bank that is simpler, more stable and with a more focused business model built around client needs,” outlined chief executive Ulrich Körner in its last results update.
Saudi investment into Credit Suisse has also been promised by its government-owned national bank, which will inject US$1.5bn for 9.9% of the Swiss bank.
This would make Saudi National Bank its largest shareholder as Credit Suisse attempts to raise US$4.2bn to draw a line under its struggles.
While Mohammed bin Salman is chairman of his country's wealth fund, it is unclear whether any new investment would be made through the national bank or through personal funds.