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SNB’s Credit Suisse holding to convert to 0.5% of UBS

Credit Suisse bank headquarters in New York Reuters/Eduardo Munoz
Saudi National Bank acquired almost a 10 percent stake in the troubled Swiss bank last year for SAR5.5 billion

Saudi National Bank’s (SNB) 9.88 percent shareholding in investment bank Credit Suisse will convert to nearly 0.5 percent of UBS following the merger of the two Switzerland-based lenders.

The Saudi bank, a top shareholder in Credit Suisse, said the Swiss lender’s investment carrying value declined 70 percent to SAR1.3 billion ($346.63 million) as of March 31, 2023.

The bank, which is 37 percent owned by Saudi sovereign Public Investment Fund (PIF), acquired almost a 10 percent stake in the troubled Swiss bank last year for SAR5.5 billion.

In March, SNB said its growth strategy will not be impacted by the UBS takeover of Credit Suisse, despite analysts predicting “heavy losses” for Gulf backers.

SNB is joined by Qatar Investment Authority and Saudi Arabian conglomerate Olayan Group, who all have varying levels of interest in the 167-year-old Swiss bank.

“SNB’s shareholding in Credit Suisse of 9.88 percent will convert into a shareholding in UBS of approximately 0.5 percent upon completion of the merger,” the bank said in a statement published on the Saudi stock exchange.

The value of SNB’s investment in Credit Suisse declined by approximately 20 percent on December 31, 2022, the statement added. The investment fell almost 70 percent during the first three months of 2023.

In March, Fitch Ratings said the UBS takeover of Credit Suisse would have a neutral impact on SNB’s ‘A-‘ rating, due mainly to the limited contribution of the Credit Suisse investment to its group asset portfolio of less than 0.5 percent of total assets.