Saudi National Bank chair resigns after Credit Suisse buyout

The chairman of Saudi National Bank, which was the main shareholder of troubled lender Credit Suisse before its buyout this month, has resigned, a statement said on Monday (Mar 27).

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 Mar 15 after AlKhudairy said that the Saudi bank would not raise its stake from 9.8 per cent due to regulatory constraints.

The following day, Credit Suisse rallied on the stock market after grabbing a US$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 Mar 19.

In the immediate aftermath of his comments, AlKhudairy tried to minimise 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 US$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 that "multiple failures" including on the regulatory front had fuelled troubles in the banking sector - "whether it is supervisory, whether it is management, whether it is concentration, whether it is (a) 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 regulator FINMA was probing how to hold bosses at Credit Suisse to account following its takeover.

"We are not a penal authority but we are exploring the corresponding possibilities," FINMA chair Marlene Amstad was quoted as saying in an interview with the weekly NZZ am Sonntag.

Saeed Mohammed Al Ghamdi, who had been serving as Saudi National Bank's CEO, will replace AlKhudairy as chair, Monday's statement said.

Talal Ahmed Al Khereiji has been appointed acting CEO, it said.