Saudi National Bank (SNB) has entered into a financial investment in Credit Suisse Group (Credit Suisse), a Switzerland-based global investment bank, for a consideration of up to $1.50 billion representing up to a 9.9 percent stake.
This investment in Credit Suisse will be a part of SNB’s overall investment portfolio of $68.7 billion, hence the holding will comprise 2.2 percent of SNB’s pro forma investment book, 3.5 percent of the total shareholders’ equity and 0.6 percent of total consolidated assets.
The transaction is expected to have a limited total impact with 20-40 bps over the next 5 years, with SNB preserving a significant buffer above regulatory capital requirements given its robust capital position.
SNB remains highly disciplined with regard to its investment portfolio and maintains its focus on continuing its successful track record of solid investment returns.
SNB has no current plans on going beyond a 9.9 percent 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.
The transaction also unlocks the potential of exploring a strategic and technical partnership for SNB to develop its product capabilities in Private Banking, Wealth Management, Asset Management and Investment Banking in Saudi Arabia and the Gulf region and to provide its customers with best-in-class services, products and capabilities to meet their financial needs by leveraging know-how transfer between Credit Suisse and SNB.
SNB is the leading banking franchise in Saudi Arabia with over 11 million customers and a significant private banking proposition. The country is one of the fastest-growing G20 economies with a burgeoning middle class that is accumulating wealth.