Khudayrí announced that he was leaving for personal reasons. But his resignation comes 12 days after he categorically ruled out in an interview with Bloomberg that the SNB would provide Credit Suisse with another financial injection if the troubled Swiss bank needed it. Chudajrí explained that if the SNB were to buy additional shares of Credit Suisse, its share would exceed ten percent, which is prevented by, among other things, regulatory reasons.
That same day, Credit Suisse’s shares plummeted to record lows, heralding a swift end to hopes of rescuing the bank without outside help. The Swiss government intervened in the matter, refusing to allow the collapse of the country’s second largest bank. After several days of hectic negotiations, its arch-rival UBS agreed to take over Credit Suisse. The value of the transaction will reach three billion Swiss francs (72 billion crowns). Credit Suisse’s existential woes have raised concerns about the health of other European banks, such as Deutsche Bank. Read details about the German bank crisis.
The Saudi SNB lost a billion dollars due to the collapse of Credit Suisse shares. Khudayrí later tried to calm the situation when, for example, pro CNBC he said the panic surrounding Credit Suisse and other banks was “completely unwarranted”.
“We had one failure here last week, but it’s nowhere near, it’s nothing like what we experienced in 2008. This is one isolated incident, regulators have prevented any possibility of it spreading,” he said. He added that the SNB already announced last October, when it joined Credit Suisse, that its stake would not exceed the ten percent limit.
The SNB is 37 percent controlled by the Saudi royal fund. Middle Eastern countries have a long history of investing in the global banking business. During the financial crisis, the funds of the ruling families of the United Arab Emirates, Qatar and Kuwait invested a total of $69 billion in banks such as Barclays, Merrill Lynch and Citigroup, according to data from Global SWF, which cites Bloomberg. At the time, Middle Eastern investors often lost money on these transactions. Even now, more players from this region are interested in Credit Suisse. The second largest shareholder, after the SNB, is the Qatari fund Qatar Holding LLC, which bought shares in Credit Suisse back in January.
