Billion dollar loan to the sheikh: This is behind UBS’s agreement with the Qataris

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Many people are rubbing their eyes in the financial hub right now: UBS is said to have loaned up to $9 billion to Qatar Sheikh Hamad bin Jassim bin Jaber Al Thani (64), also known by the acronym HBJ. This was reported by Bloomberg news agency, citing anonymous sources.

Specifically, this apparently relates to replacing the previous loan from Credit Suisse for up to $6 billion. But UBS is not only replacing it, it is also going one step further and increasing the credit limit by 50 percent.

It is not known how much HBJ received from the previous loan, and other details of the unusual deal are also unknown. The bank remains silent on this issue and understandably does not disclose any customer details.

Extremely high total

This much money for a single person is not normal at all. “This size is extremely unusual,” says Michael Klien (46), banking analyst at Zürcher Kantonalbank. “This is definitely a cluster risk. But I assume UBS is trying to minimize the risk,” Klien adds, because financial market regulator Finma will scrutinize a loan of this size very closely.

Andreas Venditti (51) was also surprised by the loan amount. As for Klien, it is also clear to Vontobel’s banking analyst: “UBS doesn’t just distribute loans this way. “I assume there are large assets deposited as collateral.” For example, share packages, company investments or real estate.

HBJ is one of the richest people in the world. Forbes estimates his fortune at around $1.2 billion. The Sheikh is also part of the billionaire family that rules the Emirate of Qatar. HBJ himself was a former foreign minister and prime minister, as well as chairman of Qatar’s sovereign wealth fund. Thanks to these billions, CS survived the financial crisis without government assistance. For a long time, the sovereign wealth fund was the largest shareholder of the defunct CS.

tough deal

It is quite possible that Iqbal Khan (47) arranged the deal. Khan is a senior asset manager at UBS. He also held the position in CS before switching to his rival amid much fanfare. In CS, Khan had maintained good relations with the Qataris.

The agreement is politically sensitive. The Emir of Qatar, HBJ’s cousin, is considered one of the most important donors of the Islamist terrorist organization Hamas. It is also trying to mediate with Hamas hostages held captive in the Gaza Strip.

In the interest of UBS

On the other hand, it is also related to UBS’s commercial interests in the region. Countries such as Saudi Arabia and the Emirates have long tried to reduce their dependence on oil and gas trade and invest in new business areas such as tourism. Major global and private banks in the Gulf region are helping. Everyone wants to get a share of the sheikhs’ billion-dollar cake.

Therefore, it may even be in UBS’s interest to know about the loan to HBJ. Even though doing business with the super rich is top secret. But there may be a clear message from the big bank behind this: “We too can play in this league and handle big deals,” Klien suspects.

Venditti also looks at credit in a broader context: “In these circles, such a deal could be an argument for retaining or gaining a customer.” This is true not only for the Arab region, but for all of Asia. Venditti says there are a lot of wealthy entrepreneurs out there who are always dependent on cash because their assets are tied up in their companies.

Source :Blick