Saudi National Bank chairman sacked over Credit Suisse investment

The Saudi National Bank appointed Saeed Mohammed al-Ghamdi as the new chair of the bank on 27 March after reportedly firing Ammar al-Khudairy for his remarks during a Bloomberg interview, Swiss media has reported. Meanwhile, Deputy CEO Talal Ahmed al-Khereiji is set to take over as acting chief executive.

Al-Khudairy caused the stock of Credit Suisse to plummet even further when he said that the Saudi National Bank would not provide more money to prop up the ailing financial institution. In contrast to the Swiss media reports, Reuters reported that al-Khudairy was not sacked but rather resigned himself.

Gulf shareholders are among the top losers of the recent Credit Suisse Group AG debacle, as fellow Swiss bank UBS Group AG agreed to acquire the troubled lender on 19 March at a steep discount of just $3.25 billion, according to CNN.

The Saudi National Bank, which is 37 percent owned by the country’s sovereign wealth fund, invested around $1.4 billion into Credit Suisse at the end of last year. The investment is now worth $329 million, according to Yahoo Finance. The bank owned around 9.9 percent of Credit Suisse’s shares, making it the largest shareholder.

Clients have pulled more than $110 billion in deposits from Credit Suisse in the last three months, which contributed to the Saudi National Bank losing more than $26 billion in market value.

However, the bank claims that the massive drop in market value would not affect its future growth plans and profitability.

Earlier this month, al-Khudairy told Reuters that the Saudi National Bank would not look at any international acquisitions and instead focus on the domestic economy.

Following the takeover by UBS, Credit Suisse shareholders will only receive $0.82 per share, while the stock traded as high as $1.96 per share before the take-over was announced.

Meanwhile, the holders of the $17 billion in “additional tier one” bonds will lose their full investment, according to Swiss regulators.

Credit Suisse acknowledged “material weakness” in its bookkeeping, causing a liquidity issue as fears of an impending financial collapse emerged with the demise of Silicon Valley Bank and Signature Bank earlier this month.