The debt was issued after the financial crisis to the Qatar Investment Authority and Saudi Arabia’s Olayan family to cut funding costs.

Swiss banking group Credit Suisse plans to buy back around SFr5.9 billion ($6 billion) of debt issued after the financial crisis to the Qatar Investment Authority and Saudi Arabia’s Olayan family to cut funding costs.

The bank will redeem the contingent convertible bonds -- which automatically become equity when reserves fall below pre-set levels -- on 23 October, the bank said. 

Qatar holds about $4.2 billion of the debt and Olayan the remainder, with the two top shareholders entitled to interest of as much as 9.5 per cent on the securities.

The bank said in a statement: “This is a key step forward in reducing Credit Suisse’s funding costs, as we continue to reshape our balance sheet and optimise our capital structure. It is another milestone in the bank’s three-year restructuring programme, which is due to be completed at the end of 2018.”

The withdrawal of the debt is part of Credit Suisse’s plans to cut investment banking in order to place its bets in wealth management. Chief executive, Tidjane Thiamm is refocusing the bank as new regulations introduced after the financial crisis -- including higher capital requirements -- forced it to abandon the investment bank-led strategy.

Repurchasing the bonds is part of a strategy to cut funding costs by about $200 million this year and $700 million next. The securities were issued in 2011 to comply with Swiss “too-big-to-fail” rules. Regulators conceived the debt instruments after the financial crisis as a way for banks to bolster their capital ratios by tapping debt investors. In July, the lender issued a $2 billion high-trigger Tier 1 capital instrument to allow it to redeem the notes.

The Qatar Investment Authority -- the Persian Gulf’s sovereign wealth fund -- owns about 5.1 per cent of Credit Suisse. The Olayan Group has a stake of about 4.93 per cent, according to Bloomberg.