Saudi National Bank Chair Resigns After Credit Suisse Comment Sparks Bank Run

Ammar Al Khudairy, the chair of Saudi National Bank (SNB), has resigned for “personal reasons” after the kingdom’s largest lender was thrust into the spotlight amid turmoil at Credit Suisse.

Saeed Al Ghamdi, the bank’s CEO, will take over as chair, the bank announced on Monday. Talal Al-Khereiji takes over as acting CEO.

In a television interview earlier this month, Alkhudairy stated that SNB, which purchased a 9.9% share in Credit Suisse last year, would not provide any further financial help. He said that purchasing more shares would have increased SNB’s position above 10%, causing a “regulatory issue.”

“The answer is absolutely not, for many reasons outside the simplest reason, which is regulatory and statutory,” Al Khudairy said responding on whether the bank was open to further injections if there was another call for additional liquidity.

Although Al Khudairy’s remarks followed known bank policy, they sent Credit Suisse’s share price into a spiral, triggering frenzied negotiations that concluded in a quick merger with Swiss rival UBS.

Regional executives claimed he drew disproportionate attention to the SNB and the kingdom’s larger economic objective. The sovereign Public Investment Fund, which is pushing Saudi Arabia’s crown prince, Mohammed bin Salman’s reform initiative, is the bank’s largest stakeholder.

The Credit Suisse’s top shareholder has lost more than one-third of its value in three months.

The SNB lost around $1 billion as a result of UBS’s takeover of Credit Suisse, but one source familiar with the circumstances said the holdings in the Swiss bank accounted for less than 2% of its investment portfolio and would have a small impact on profitability.

“Changes in the valuation of SNB’s investment in Credit Suisse have no impact on SNB’s growth plans and forward-looking 2023 guidance,” the bank said in a statement to the Saudi stock exchange.

The UBS deal has sparked considerable controversy because, under an agreement mediated by Swiss authorities, shareholders received a payoff while bondholders were wiped out.

In November 2022, SNB purchased about 9.9 percent of Credit Suisse for SR5.5 billion, with the Saudi bank later stating that the deal represented only 0.5% of its total assets and approximately 1.7% of its whole investment portfolio.


Information for this briefing was found via Financial Times, Arab News, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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