SNB says no current plans to raise investment in Credit Suisse, stake ‘sufficient’ to benefit from upside in performance

Logo of Saudi National Bank

Saudi National Bank (SNB) does not have any current plans on going beyond a 9.9% shareholding in Credit Suisse and any future investment would be appraised individually, at the time, by carefully considering the merits of such investment based on financial impact, capital treatment and long-term shareholder value creation.

In a statement to Argaam, SNB said that its SAR 5.7 billion investment in Credit Suisse Group AG will support a strong restructuring program within Credit Suisse.

SNB will review the execution of the strategy articulated by Credit Suisse with their Q3 2022 results and decide on any future steps at the appropriate time.

We believe this investment will be accretive in the medium- to long-term and recognize that there may be some short-term execution risk.

This investment in Credit Suisse is a financial investment, which will be a part of SNB’s overall investment portfolio of $68.7 billion, SNB added, expecting a limited impact on capital between 20-40 basis points over the next five years. SNB will preserve a significant buffer above regulatory capital requirements given its robust capital position.

“This stake is meaningful and sufficient for us to benefit from the upside in performance, as well as anchoring our strategic alliance. We do not see any current need to go beyond this, given our objectives,” SNB added.

SNB has ample liquidity and the transaction can comfortably be financed via internal resources. However, SNB will consider all options to finance the investment in cost-effective manner considering liquidity/risk-management objectives of the bank.

SNB announced that it is committed to participate in the capital raise announced by Credit Suisse Group AG. It will invest up to CHF 1.5 billion (SAR 5.7 billion) in the group to hold a stake of up to 9.9% through a private placement of non-pre-emptive shares by Credit Suisse, Argaam earlier reported.