UBS' acquisition of Credit Suisse and a sharp decrease in the latter's share prices have a neutral impact on Saudi National Bank’s (SNB) Long-Term Issuer Default Rating of ‘A-’, global rating agency Fitch said in a report.
This is mainly driven by Credit Suisse's very limited contribution to SNB’s group assets, constituting less than 0.5% of total assets and less than 2% of the group’s investment portfolio.
"We view the impact as neutral for our ‘bbb+’ assessment of SNB’s capitalization and leverage. The score considers the bank’s healthy asset quality, moderate credit concentration and healthy internal capital generation," the agency said.
Fitch views SNB’s funding and liquidity profile as strong with a score of 'A-', one of the highest scores in the GCC.
"This is underpinned by a strong retail funding franchise and the highest share of current and savings accounts in Saudi Arabia, at 75% at end-2022," it noted. In October 2022, SNB said it is committed to participate in the capital raise announced by Credit Suisse Group. The Saudi bank added 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. On March 19, UBS stated that it submitted a bid to buy Credit Suisse at CHF 0.76 a share, totaling CHF 3 billion ($3.2 billion).
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