The chairperson of Saudi National Bank has resigned, a statement said Monday, nearly two weeks after his comments on Credit Suisse sent the Swiss lender’s stock cratering and ultimately saw rival UBS acquire the firm.
The resignation of Ammar al-Khudairy at Saudi National Bank, the largest commercial bank in the oil-rich kingdom, comes just months after the lender invested an additional $1.5 billion in Credit Suisse to take its holding in the Swiss bank to nearly 10% of its value.
While al-Khudairy sought to clarify his remarks after making them on March 15, they caused Credit Suisse shares to drop by around a third of their value and fueled its ultimate collapse.
The incident further spooked international markets, already reeling from other bank collapses and high inflation brought on in part by Russia’s war on Ukraine.
The filing on Riyadh’s Tadawul stock exchange said al-Khudairy would be replaced by Saeed al-Ghamdi, the bank’s chief executive. It did not elaborate on al-Khudairy’s departure, only saying it came “due to personal reasons.”
Saudi National Bank stock traded at over $12 a share Monday. They had been nearly $22 a share over the last year.
Shares of Credit Suisse sank over 30% after al-Khudairy told Bloomberg on March 15 that its biggest shareholder – the Saudi National Bank – would not provide more money to the Swiss lender.
“The answer is not, for many reasons outside the simplest reason, which is regulatory and statutory,” al-Khudairy said at the time. “We now own 9.8% of the bank. If we go above 10%, all new rules kick in, whether by our regulator, the European regulator, or the Swiss regulator.”
He added: “There is a glass ceiling, and we do not intend entertaining of going beyond that.”
The remarks were seen as a trigger to a further sell-off in the Swiss bank’s shares and exacerbated a crisis of confidence in the lender that had already seen clients pull more than $110 billion in the last three months of 2022.
Hours later, Switzerland’s central bank agreed to lend Credit Suisse up to $54 billion to shore up its finances.
The next day, al-Khudairy told CNBC: “It’s panic, a little bit of panic. I believe completely unwarranted, whether it be for Credit Suisse or for the entire market.” But the damage was already done.
Banking giant UBS on March 19 said it would buy Credit Suisse for almost $3.25 billion. That’s even as Credit Suisse had some $1.4 trillion in assets under management at the end of last year.
Gulf Arab investors in Saudi Arabia and Qatar have been among the hardest hit by Credit Suisse’s collapse.
“The Saudi National Bank was a top stakeholder ... and now faces over $25 billion of losses. The Saudi conglomerate Olayan Group also had a 3.27% stake in Credit Suisse,” Oxford Economics said Thursday.
“The Qatar Investment Authority had a 6.8% holding and was a major landlord for the bank’s London branch. However, we expect the turmoil to be contained to short-term financial market disruption with limited spillover.”
