Saudi National Bank Loses Over $1 Billion After UBS’s takeover of Credit Suisse
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Sulaiman
- . March 21, 2023
- . Update: March 21, 2023 7:43 pm
The largest shareholder in Credit Suisse, Saudi National Bank, has seen a loss of about 80% on its investment. In a deal mediated by the Swiss government, rival Credit Suisse, which went under over the weekend, was bought out by UBS Group AG, Switzerland’s largest banking group, for just over $3.25 billion, or 60% less than its share price. At Friday’s closing price of 1.86 Swiss francs, Credit Suisse was valued at $8.7 billion.
9% of the Swiss bank is owned by the Saudi National Bank, which is based in Riyadh. In November 2022, it made an investment of 1 point 4 billion Swiss francs ($1 point 5 billion), or 3 point 82 francs per share.
Under the terms of the agreement, UBS will pay the shareholders 0.76 francs for each share of Credit Suisse it acquires for $3.25 billion. This implies that Saudi National Bank will likely lose $1.22 billion, or about 80% of its investment.
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Saudi National Bank, according to a CNBC report, claimed that there was “nil impact on profitability” from a “regulatory capital perspective” in an official statement.
Less than 0 point 5% of SNB’s total assets were invested in Credit Suisse as of December 2022, and c. 1.7 percent of SNB’s investment portfolio,” the statement said. .
From a “regulatory capital perspective,” there was “nil impact on profitability. ”
The statement continued, “Changes in the valuation of SNB’s investment in Credit Suisse have no impact on SNB’s growth plans and forward-looking 2023 guidance.
The Qatar Investment Authority, Credit Suisse’s second-largest shareholder, owns a 6.8% stake in the bank but has not disclosed any financial losses. .
Despite its efforts to recover from its significant losses and deal with a number of issues, Credit Suisse was unable to restore the confidence of investors.
