Saudi National Bank says strategy not impacted by Credit Suisse deal - Reuters

By Scott Kanowsky 

Investing.com -- Saudi National Bank has said the strategy for its 2023 financial year will not be impacted by a decline in the valuation of its investment in Credit Suisse Group AG (SIX:CSGN) (NYSE:CS) following the lender's takeover by larger rival UBS (NYSE:UBS).

In a bourse filing reported on by Reuters, Saudi Arabia's biggest bank by assets noted that while the deal will potentially hit its capital adequacy ratio by about 35 basis points, profitability will not be damaged.

“Changes in the valuation of SNB’s investment in Credit Suisse have no impact on SNB’s growth plans and forward-looking 2023 guidance,” SNB said in the filing, as quoted by Reuters.

The lender became Credit Suisse's top shareholder last November when it bought an almost 9.9% stake in the embattled Swiss bank for 5.5 billion riyals (SAR 1 = $0.2662). At the time, SNB purchased 307.6 million Credit Suisse shares for 3.82 Swiss francs (CHF 1 = $1.0810) each.

But under the terms of the $3.25B tie-up with UBS, Credit Suisse shares are valued at 0.76 Swiss francs per share. According to CNBC, Riyadh-based SNB confirmed that it subsequently faces a loss of around 80% on its Credit Suisse investment.

The statement comes after SNB chairman Ammar Al Khudiary told Bloomberg Television last week that it would "absolutely not" be increasing its investment in Credit Suisse, helping spark a broader crisis around the bank that ultimately resulted in its frantically-negotiated, government-brokered merger with UBS.