Saudi National Bank strategy unaffected by hit to Credit Suisse investment

Dubai (Reuters) – Saudi National Bank’s (1180.SE) growth strategy will be unaffected by the reduced valuation on its investment in Credit Suisse , it said on Monday after the Swiss bank’s takeover deal with domestic rival UBS (UBSG.S) on Sunday.

The Saudi lender, the kingdom’s largest by assets, acquired almost 9.9% of Credit Suisse for 5.5 billion riyals ($1.46 billion) 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 of 3 billion Swiss francs ($3.23 billion) values Credit Suisse shares at 0.76 francs each, more than 80% lower than the price paid by the Saudi bank.

That means Saudi National Bank is sitting on a loss of roughly $1.17 billion 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-looking 2023 guidance,” Saudi National Bank said in a bourse filing on Monday.

Swiss authorities had announced on Sunday that UBS would acquire its rival for $3.23 billion 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 0.5% of the Saudi lender’s total assets of more than 945 billion 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.

($1 = 3.7560 riyals)

($1 = 0.9287 Swiss francs)