Despite a decline in its investments in Credit Suisse, Saudi National Bank (SNB) increased its net profit by about 12 percent in the first quarter compared to the same period last year, thanks to higher fees income and investment gains.
The Saudi bank, the kingdom’s largest bank by assets, had earlier said the book value of its investment in Swiss Credit Suisse that fell 70 percent to 1.3 billion riyals ($346.63 million) in the first quarter would not affect its profits.
Saudi National Bank revealed that the bank’s 9.88 percent stake in Credit Suisse will be converted into a stake in UBS of about 0.5 percent upon completion of the merger.
The Saudi bank invested 5.5 billion riyals last year to acquire a 9.88 percent stake in Credit Suisse.
Read: Credit Suisse admits $69 billion in outflows in Q1
UBS Group agreed in March to acquire Credit Suisse in a historic $3 billion deal brokered by the Swiss government after its rival came close to collapse due to customer withdrawals and a sharp drop in its share prices, ending years of scandals and losses.
Saudi Arabia’s National Bank, in which the Saudi sovereign wealth fund owns 37 percent, had a stake in Credit Suisse at about 9.88 percent before UBS agreed to buy its rival.
The former chairman of the Saudi National Bank, Ammar Al-Khudairi, resigned days after the Swiss government took the acquisition.
The bank said in a statement on the Saudi Exchange that Saudi National Bank’s investments in Credit Suisse amounted to 5.5 billion riyals (through a share offering on November 24, 2022, and a rights issue on December 8, 2022).
On the impact of his investment in Credit Suisse on its financial results for the first quarter of 2023, it said that the financial impact on the bank’s statement of financial position was a decrease in the fair value of the bank’s investment in Credit Suisse by approximately 70 percent during the first quarter of 2023 (the book value of Credit Suisse’s investment amounted to 1.3 billion riyals as at March 31, 2023).
Saudi National Bank posted a net profit of more than 5 billion riyals ($1.34 billion) in the three months to March 31, up from 4.5 billion riyals in the same period a year ago.
That exceeded analysts’ estimate of 4.8 billion riyals, according to Refinitiv data.
Operating income rose nearly 8 percent in the first quarter to 8.7 billion riyals, thanks to an increase in income from special commissions, financing, and investments, which rose about 11 percent year-on-year, the statement said.
Total assets rose three percent compared to Dec. 31, 2022, and customer deposits increased eight percent during the first quarter although they rose only 0.7 percent year-on-year.
Total impairment provisions for projected credit and other losses rose to 493 million riyals in the first quarter, up about 28 percent from the same period a year ago but nearly 200 percent higher than the previous quarter.
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