Saudi National Bank chair resigns after Credit Suisse buyout

Saudi National Bank chair resigns after Credit Suisse buyout

Saudi National Bank chair resigns after Credit Suisse buyout

The chairman of Saudi National Bank, the main shareholder of troubled lender Credit Suisse which was bought out this month, has resigned, a statement said yesterday.

The Saudi bank’s board of directors “accepted the resignation” of Ammar AlKhudairy “due to personal reasons,” said the statement published on the Saudi stock exchange.

Credit Suisse’s shares plummeted on March 15 after AlKhudairy said the Saudi bank would not raise its stake from 9.8 percent due to regulatory constraints.

The following day, Credit Suisse rallied on the stock market after grabbing a $54 billion central bank lifeline in a bid to restore investor confidence.

But fears about the health of the broader financial sector led to its takeover by domestic rival UBS on March 19.

In the aftermath of his comments, AlKhudairy tried to minimize what he described as a “panic.”

“If you look at how the entire banking sector has dropped, unfortunately, a lot of people were just looking for excuses,” he told CNBC television.

“It’s panic, a little bit of panic. I believe completely unwarranted, whether it be for Credit Suisse or for the entire market.”

The Wall Street Journal reported last week that Saudi National Bank’s $1.5 billion investment in Credit Suisse was made at the behest of the kingdom’s de facto ruler, Mohammed bin Salman.

It said that some officials at the Saudi sovereign wealth fund thought the move “was too risky... raising legal issues and the potential for large future losses.”

In an interview with AFP following AlKhudairy’s comments, Saudi Finance Minister Mohammed al-Jadaan did not comment on specific financial institutions but said “multiple failures” including on the regulatory front had fueled troubles in the banking sector, “whether it is supervisory, whether it is management, whether it is concentration, whether it is mismatch of asset liability.”