Credit Suisse Deal Hands Top Holder $1 Billion Investment Loss

(Bloomberg) —

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Credit Suisse Group AG’s top shareholder has seen the value of its investment plummet by about $1 billion in a matter of months, making it one of the biggest losers in the saga that culminated in UBS Group AG agreeing to acquire the troubled lender.

Saudi National Bank’s 9.9% stake in Credit Suisse is now valued at about 304 million Swiss francs ($329 million) following the UBS offer, according to Bloomberg calculations. The Riyadh-based lender invested 1.4 billion Swiss francs in Credit Suisse late last year.

Since then, shares in Saudi National Bank have slumped by about a third, wiping more than $25 billion off its market value. The stock fell 2% at the open in Riyadh Monday.

In a statement earlier Monday, the lender said changes in the valuation of its investment in Credit Suisse “have no impact” on growth plans and its 2023 guidance. The bank’s total assets exceed 945 billion riyals ($251 billion).

Speaking in an interview with Bloomberg TV last week, Saudi National Bank Chairman Ammar Al Khudairy said “absolutely not” when asked whether it would be open to further investments in Credit Suisse if there was another call for additional liquidity.

The Swiss bank’s stock plunged to the lowest level on record and its credit spreads surged following his comments. That helped drag all European banks lower as investors shied away from risk following the collapse of three lenders in the US.

On Sunday, UBS agreed to pay 3 billion francs for Credit Suisse in an all-share deal that includes extensive government guarantees and liquidity provisions. The price per share marked a 99% decline from Credit Suisse’s peak in 2007.