UBS Group AG has provided a $9 billion credit facility to Qatari Sheikh Hamad bin Jassim bin Jaber Al Thani (HBJ), as reported by Bloomberg, citing sources knowledgeable about the situation. This move signifies the Swiss bank’s efforts to broaden its presence in the Middle East.
UBS agreed to provide the credit facility to the former Qatar prime minister, which is 50% more than the total of existing lines from UBS and Credit Suisse that it replaces.
Bloomberg explained the move by UBS is to keep a presence in the Middle East following the takeover of Credit Suisse earlier this year:
The need to keep Sheikh Hamad on-side underlines UBS’s bid to secure its presence as a manager of wealth for oil-rich royalty and tycoons in the Middle East following the demise of Credit Suisse, which had a significant business in the region. The Gulf countries hold some of the largest wealth concentrations in the world.
HBJ, as the sheikh is known, previously ran the gas-rich country’s sovereign wealth fund. During his tenure at the Qatar Investment Authority it built stakes in commodities trader Glencore Plc, British lender Barclays Plc and luxury department store Harrods. The fund also became one of Credit Suisse’s largest shareholders.
The sheikh has since become one of Deutsche Bank AG’s largest shareholders, and has family offices which deploy capital globally into public equities, real estate and private assets.
During the summer, UBS saw the departure of Aladdin Hangari, the top relationship manager at Credit Suisse for the Qatari royal family. Instead of joining UBS after the takeover, Hangari moved to HSBC, taking five colleagues with him. People familiar with the situation said Hangari is attempting to lure more talent from Credit Suisse’s wealth division in the Middle East.
“Hangari’s departure comes as a setback to the ambitions of UBS to build on its on-the-ground presence in the region,” Bloomberg said.
To sum up, UBS, following the takeover of Credit Suisse, is trying to increase its presence in the Middle East by handing HBJ a multi-billion dollar credit line. Follow the money, ‘they say.’