Belgian-Dutch bank Fortis NV has rushed to oil-rich Russia billionaire Suleiman Kerimov with hat in hand for a $630 million injection, says the WSJ. The move follows a surprise announcement lask week that the bank would raise 8.3 billion euros. It also continues the trend of Western banks turning to commodity-rich foreigners for emergency capital.
Kerimov’s Millenium group already has positions in Morgan Stanley, Credit Suisse, and Deutsche Bank. He is known as an activist shareholder, which means that his money–unlike the capital many banks have raised in the middle east–comes with strings attached.
As bank stock prices continue to tumble, however, the West’s demolished banks have to turn somewhere. And they’ll likely keep on doing it, until even foreign investors get gun-shy. WSJ:
Banks in the U.S. and Europe may have little choice but to look further afield for money in coming months. Regulators and investors are demanding that financial institutions build stronger capital cushions against losses that are expected to increase through 2009. At the same time, Asian and Middle Eastern investors’ appetite for financial stocks may wane as more banks turn to them — and return to them — for help.