Could owning NAB shares soon include a slice of Credit Suisse?

Lifting the bonnet on Credit Suisse is on the cards if one NAB executive gets the opportunity.

Key points
  • ASX bank shares are trading higher on Wednesday as banking concerns are calmed by additional assurances in the US
  • Talks of what will come of Credit Suisse's Australian operations have kicked off
  • NAB's private wealth executive, Michael Saadie, isn't ruling out the possibility of a deal if given the chance

Shares in National Australia Bank Ltd (ASX: NAB) are shimmering a pleasant shade of green on Wednesday.

Their positive move mirrors the reception US bank stocks received during trade on Wall Street overnight, as fears of more bank runs temper. Deposit outflows from regional banks are believed to be 'stabilising', thanks to the US Federal Reserve's freshly instituted lending facilities.

However, the fate of Credit Suisse — formerly Switzerland's second-largest bank — has already been sealed. After succumbing to a liquidity crunch, Credit Suisse is now being engulfed by the larger Swiss investment bank, UBS, for 3 billion Swiss Francs (A$4.8 billion).

Now, a handful of people are ruminating on the future of Credit Suisse's private banking arm in Australia.

Close-up of a woman taking a big bite out of a block of cheese, indicating a share price rise for ASX cheese companies

Image source: Getty Images

Could NAB take a bite of the fallen giant?

The dust has hardly settled on UBS's takeover of Credit Suisse and already there are more questions than answers. One of which is: what will happen to the bank's operations in Australia?

It is uncertain whether UBS will retain all of the baggage that comes along with the deal. Some are speculating that sales could be made to fortify the merged business. Especially in Australia due to UBS already holding a prominent position in the market.

In an interview with The Australian, NAB private wealth executive Michael Saadie suggested that a deal for the local private bank arm of Credit Suisse isn't out of the question. In fact, Saadie implied it would be ignorant to not consider it, stating:

If they were put on the market, it would be remiss of me and the leadership team not to be lifting the bonnet on it. I can't really comment but they're [Credit Suisse's Australian private bank] the sorts of opportunities that I think all players would have to have a look at.

Credit Suisse wouldn't be the first acquisition of a foreign bank's Australian operations if it were to eventuate. In June 2022, the Aussie banking major added Citigroup's consumer business for $1.2 billion, sending NAB shares higher on the day.

It is believed the Swiss bank held an estimated $28 billion of assets under advice in Australia. However, that figure may have altered as some clients look to take their money elsewhere amid the turbulence.

How are NAB shares travelling so far this year?

The big four bank constituent is down 3.7% since the start of 2023, making it the second worst-performing member of the bunch. The only major with a more disappointing return so far is Westpac Banking Corp (ASX: WBC), which is down 4.8%.

However, NAB's first-quarter update in February was rather positive. The release showed cash earnings had grown 18.7% and the bank's net interest margin inched another 12 basis points higher to 1.79%.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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