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21-03-23
Saudi National Bank Confirms No Impact on Growth Plans After Credit Suisse Buyout by UBS
(MENAFN) Saudi National Bank (SNB), the largest shareholder of Credit Suisse, has confirmed that the Swiss lender's buyout by UBS will not have an impact on its growth plans or profitability. The SNB made a SR5.5 billion (USD1.4 billion) investment in Credit Suisse in November 2022, but as of a month later, it only represented 0.5 percent of the Saudi firm's total assets and approximately 1.7 percent of its investment portfolio.
UBS is buying Credit Suisse for almost USD3.25 billion, in a deal orchestrated by regulators to avoid further market-shaking turmoil in the global banking system. Swiss authorities pushed for UBS to take over its smaller rival after a plan for Credit Suisse to borrow up to 50 billion francs (USD53.76 billion) failed to reassure investors and the bank's customers.
In a statement to the Saudi stock exchange, SNB said that changes in the valuation of its investment in Credit Suisse have no impact on its growth plans and forward-looking 2023 guidance. As of December 2022, the impact on SNB's Capital Adequacy Ratio from the Mark-to-Market decline in Credit Suisse was an estimated 15 basis points with zero impact regarding profitability.
However, with the new announcement of the UBS buyout, the potential impact to SNB's Capital Adequacy Ratio is around 35 basis points, also with zero impact regarding profitability. Despite this, SNB assured that any changes in the valuation of its investments in Credit Suisse will have no impact on its 2023 guidance nor its growth plans in the future.
With assets surpassing SR945 billion, SNB remains well-capitalized and liquid, with levels that remain above the prudential thresholds. The confirmation that the Credit Suisse buyout by UBS will not have an impact on SNB's growth plans or profitability is reassuring to investors and stakeholders, given the size of the investment made by the Saudi firm. It also highlights the resilience of SNB and its ability to weather changes in the global banking industry, further solidifying its position as a top financial institution in the Middle East.
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