The chairman of one of Credit Suisse's newest and biggest shareholders called on the beleaguered bank to deliver a swift overhaul and return to a "very stable, conservative Swiss banking posture."
Saudi National Bank, the kingdom's largest lender and majority-owned by the Saudi government, announced Wednesday that it was investing up to $1.5 billion in Credit Suisse — representing a stake of up to 9.9%.
"We got it at the floor price. I think the bank has been battered," Ammar Alkhudairy told CNBC's Hadley Gamble on Sunday. "It's trading at less than a quarter of book value, of tangible book value, which is, which is a steal. And it's 160-year-old brand, the brand has a lot of value." The bank is reportedly set to become the second-largest shareholder of Credit Suisse, second to Harris Associates.
The Swiss lender posted a third-quarter net loss of 4.034 billion Swiss francs ($4.09 billion) last week, significantly worse than analyst estimates, and announced a massive strategic overhaul. Shares are down around 55% this year after several scandals, management changes and weak earnings releases.
In the anticipated strategic shift, the bank vowed to "radically restructure" its investment arm to significantly cut its exposure to risk-weighted assets, which are used to determine a bank's capital requirements. It also aims to cut its cost base by 15%, or 2.5 billion Swiss francs, by 2025.
The SNB chairman cited Credit Suisse's investment banking unit as the Achilles' heel of the company, accentuated by the current climate of increased market volatility.
"The biggest overhang for Credit Suisse, over the past couple of years ... has been the volatility of the performance of their investment bank," he told CNBC.