Saudi National Bank has hit a loss of almost 80 percent on its Credit Suisse investment, it told CNBC on Monday. The Riyadh-based bank has around 10 percent in Credit Suisse, after it invested $1.5 billion (1.4 billion Swiss francs) for 3.82 Swiss francs for each share in the latter in November 2022, making it the largest shareholder in the Swiss lender.
Earlier in the day, it was reported that the UBS Group AG has agreed to buy Credit Suisse Group AG in a government-brokered deal aimed to contain a crisis of confidence that had begun to spread across financial markets globally.
Under the rescue deal's terms, UBS is paying 0.76 Swiss francs per share to the shareholders of Credit Suisse.
The discount comes on the backdrop of regulators trying to shore up the banking system globally.
The rescue deal also follows a few tumultuous weeks where the US-based Silicon Valley Bank as well as First Republic Bank collapsed and the banking sector globally saw major downturn in stock prices.
Despite the loss, the Riyadh-based Saudi National Bank said its broader strategy remains the same. Its shares were trading 0.58 percent up around 9.20am London time.
Saudi National Bank in a statement said that as of December 2022, its investment in Credit Suisse comprised less than 0.5 percent of the former's total assets and 1.7 percent of its investments portfolio.
The bank said the impact on probability was nil from a the perspective of regulatory capital. It also said that the changes in the valuation of the bank's investment in the Swiss lender had no impact on the former's growth plans and 2023 forward looking guidance.
Stock of UBS, which is also Switzerland's largest bank, was trading 10.5 percent down at 9.28am London time, whereas the
banking sector in Europe was trading 4 percent lower. On the other hand, Credit Suisse was a whopping 60 percent down.
