Credit Suisse's largest shareholder, Saudi National Bank (SNB), said changes in the valuation of its investment in the troubled Swiss lender have no impact on SNB’s growth plans and forward looking 2023 guidance.
Credit Suisse saw its share price tumble last week in the fallout from the meltdown at Silicon Valley Bank, dragging SNB's valuation down. SNB stock went up on Sunday following news of UBS agreeing to acquire Credit Suisse but pared some of its gains on Monday.
In a statement on the Saudi stock exchange Tadawul on Monday, the Saudi lender said SNB’s investment in Credit Suisse constituted less than 0.5% of SNB’s total assets of 945 billion riyals ($252 billion), and approximately 1.7% of SNB’s investments portfolio.
In the light of the recent market announcement, the potential impact to SNB’s capital adequacy ratio is about 35 basis points--compared with 15bps as of December 2022--with nil impact on profitability, the kingdom's biggest lender said.
SNB acquired a 9.9% stake in Credit Suisse last year after taking part in the Swiss lender's capital raising and committed to investing up to $1.63 billion. Following the more than 30% drop in Credit Suisse's shares last week, SNB said it would not increase its stake in CS to 10% or above as it would be in breach of regulations.
On Sunday, UBS announced that it has agreed to take over Credit Suisse to "secure financial stability and protect the Swiss economy". According to media reports on Monday the Swiss National Bank has offered a $100 billion liquidity line to UBS Group to aid the takeover.
On Monday morning SNB shares were trading at 42.75 SAR, which is 1.8% down from Sunday’s peak.
(Reporting by Brinda Darasha; editing by Seban Scaria)