Topline
The chairman of Saudi National Bank, which was the largest shareholder of Credit Suisse, has resigned, according to a statement published Monday on the Saudi stock exchange, weeks after his comments helped tip the beleaguered Swiss bank’s share price into freefall, spooking already skittish financial markets and ultimately leading to a takeover by its compatriot rival UBS.
Key Facts
SNB’s board said in a statement it has “accepted” Ammar Al Khudairy’s resignation, which was “due to personal reasons.”
The move comes days after Al Khudairy said SNB would “absolutely not” pump any more money into the struggling Swiss bank, pushing its stock to a record low earlier this month and helping drag other European banks down as well.
Swiss banking giant UBS ultimately struck a $3.2 billion deal to rescue its longtime national rival, which was brokered by Swiss authorities and came at a steep discount.
SNB chief executive Saeed Mohammed Al Ghamdi will replace Al Khudairy as chair, the bank said.
News Peg
SNB was Credit Suisse’s top shareholder and Al Khudairy’s comments came at an exceedingly poor time and intensified troubles at the Swiss bank. He ruled out investing any more money and taking its share of the Swiss institution past 10%, not least for “regulatory and statutory” reasons. Credit Suisse, already reeling from nearly a week of straight losses amid an array of controversies and an acknowledgment of “material weaknesses” in its financial reporting, nosedived and share prices hit record lows. Worried over the prospect of a banking crisis, the Swiss government brokered a deal for UBS to acquire its longtime rival.
Big Number
$1 billion. That’s how much Saudi National Bank lost from its investment in Credit Suisse in the months since acquiring a roughly 9.9% stake last year, according to Bloomberg.
Tangent
The slump at Credit Suisse came amid broader concerns in the financial sector following the collapse of several U.S. lenders, including Silicon Valley Bank. Unlike those U.S. lenders, which are significant but relatively minor players in the banking ecosystem, Credit Suisse is a major figure of international stature once considered too large to fail. Its demise marks the start of a new era for lending in Switzerland and a tough deal for taxpayers, as well as the creation of a new, gigantic institution.
UBS Buying Rival Credit Suisse In $3.2 Billion Rescue Deal (Forbes)
Credit Suisse Stock Plunges To Record Low As Bank Concerns Grow (Forbes)
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