The chairman of Saudi National Bank (SNB), which was the main shareholder of troubled lender Credit Suisse Group AG before its buyout this month, has resigned, a statement said yesterday.
SNB’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 Arabian bank would not raise its stake from 9.8 percent due to regulatory constraints.
Photo: Reuters
The following day, Credit Suisse rallied on the stock market after obtaining a US$54 billion central bank lifeline in a bid to restore investor confidence.
However, fears about the health of the broader financial sector led to its takeover by domestic rival UBS Group AG on Sunday last week.
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,” he said.
The Wall Street Journal last week reported that Saudi National Bank’s US$1.5 billion investment in Credit Suisse was made at the behest of the kingdom’s de facto ruler, Crown Prince Mohammad bin Salman.
It said that some officials at the Saudi Arabian sovereign wealth fund thought the move “was too risky... raising legal issues and the potential for large future losses.”
In an interview following AlKhudairy’s comments, Saudi Minister of Finance Mohammed al-Jadaan did not comment on specific financial institutions, but said that “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.”
He added that he did not believe those risks applied to Saudi Arabia.
“Just focusing on Saudi, you will go back to history, and you will hear a lot of comments that the two regulators in Saudi Arabia are quite conservative, and that’s what we then benefit from in a situation of distress,” he said.
A media report on Sunday said that the Swiss Financial Market Supervisory Authority (FINMA) was probing how to hold bosses at Credit Suisse accountable following its emergency takeover by UBS.
“We are not a penal authority, but we are exploring the corresponding possibilities,” FINMA Chairwoman Marlene Amstad was quoted as saying in an interview with NZZ am Sonntag weekly.
Saeed Mohammad al-Ghamdi, who had been serving as SNB’s CEO, is to replace AlKhudairy as chairman, yesterday’s statement said.
Talal Ahmed al-Khereiji has been appointed acting CEO, it added.
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