Credit Suisse deal hands Saudi National Bank US$1 billion investment loss

CREDIT Suisse’s top shareholder Saudi National Bank has seen the value of its investment plummet by about US$1 billion in a matter of months.

This makes the Saudi bank one of the biggest losers in the saga that culminated in UBS agreeing to acquire the troubled Swiss lender.

Saudi National Bank’s 9.9 per cent stake in Credit Suisse is now valued at about 304 million Swiss francs (S$439 million) following the UBS offer, as indicated by Bloomberg calculations. The Riyadh-based lender invested 1.4 billion Swiss francs in Credit Suisse late last year. 

Since then, shares in Saudi National Bank have slumped by about a third, wiping more than US$25 billion off its market value. The stock fell 2 per cent at the open in Riyadh on Monday (Mar 20).

In a statement earlier on Monday, the lender said that changes in the valuation of its investment in Credit Suisse “have no impact” on growth plans and its 2023 guidance. The bank’s total assets exceed 945 billion riyals (S$338 billion).

Speaking in an interview last week, Saudi National Bank chairman Ammar Al Khudairy said “absolutely not” when asked whether the bank would be open to further investments in Credit Suisse if there was another call for additional liquidity. 

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The Swiss bank’s stock plunged to the lowest level on record, and its credit spreads surged following his comments. That dragged all European banks lower, as investors shied away from risk following the collapse of three lenders in the US. 

On Sunday, UBS agreed to pay three billion francs for Credit Suisse in an all-share deal that includes extensive government guarantees and liquidity provisions. The price per share marked a 99 per cent decline from Credit Suisse’s peak in 2007. BLOOMBERG