#Saudi National Bank to Hold 0.5% of UBS After Credit Suisse Merger - Bloomberg

Saudi National Bank to Hold 0.5% of UBS After Credit Suisse Merger - Bloomberg

Credit Suisse Group AG’s largest shareholder, Saudi National Bank, will hold about a 0.5% stake in UBS Group AG once the Swiss lenders complete their merger.

The Riyadh-based bank, which is 37% owned by the kingdom’s sovereign wealth fund, held about 9.88% of Credit Suisse before UBS agreed to buy its rival in a historic, government-brokered deal.

Reporting first-quarter results that beat estimates on Monday, Saudi National Bank said its investment of 1.4 billion francs ($1.6 billion) in Credit Suisse had declined by approximately 20% by the end of 2022 and then a further 70% during the first three months of this year. The carrying value of the investment at the end of March was 1.3 billion riyals ($346.6 million), it said.

Still, there was “no income statement impact” as the bank had made an “irrevocable election, as permitted by the accounting standards, to present subsequent changes in the fair value of the Credit Suisse investment through other comprehensive income,” the Saudi lender said.

UBS agreed to takeover Credit Suisse in March after its rival was pushed close to collapse by client withdrawals and a dramatic share-price decline, capping years of scandals and losses. Saudi National Bank’s former Chairman Ammar Al Khudairy resigned just days after his comments to Bloomberg TV helped trigger the slump in the stock and bonds that prompted the Swiss government to step in and arrange the takeover.

Credit Suisse “had no effect on Saudi SNB’s earnings, yet equity fell 3.1 billion riyals as comprehensive incomes were hit, trimming the lender’s CET1 ratio by about 45 bps, we calculate,” said Bloomberg Intelligence senior industry analyst Edmond Christou.