Saudi National Bank’s growth strategy will be unaffected by the reduced valuation on its investment in Credit Suisse, it said yesterday after the Swiss bank’s takeover deal with domestic rival UBS on Sunday.
The Saudi lender, the kingdom’s largest by assets, acquired almost 9.9 per cent of Credit Suisse for 5.5 billion riyals ($1.46bn) last November and is the troubled Swiss bank’s largest shareholder.
Saudi National Bank bought 307.6 million Credit Suisse shares for 3.82 Swiss francs ($4.11) per share. The UBS offer of3bn Swiss francs ($3.23bn) values Credit Suisse shares at 0.76 francs each, more than 80pc lower than the price paid by the Saudi bank.
That means Saudi National Bank is sitting on a loss of roughly $1.17bn on its investment, Reuters calculations show.
“Changes in the valuation of SNB’s investment in Credit Suisse have no impact on SNB’s growth plans and forward-looking2023 guidance,” Saudi National Bank said in a bourse filing yesterday.
Swiss authorities had announced on Sunday that UBS would acquire its rival for $3.23bn as part of a wider state-backed rescue plan.
Saudi National Bank’s statement added that the potential impact to its capital adequacy ratio is about 35 basis points, with no impact on profitability.
Investment in Credit Suisse formed less than 0.5pc of the Saudi lender’s total assets of more than 945bn riyals as of last December.
Saudi National Bank’s chairman last week said the bank was not looking at any international acquisitions and was instead focused on growth in the Saudi market.
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