THE CHAIR of the Saudi National Bank (SNB) stepped down yesterday just a fortnight after a clumsy media interview led in part to the collapse of Credit Suisse - in which the Middle East operator was the largest shareholder. SNB said in a statement that Ammar Al Khudairy (pictured) had resigned for "personal reasons" and the current chief executive will take over as chair of the lender.

The Saudi National Bank became Credit Suisse's largest shareholder in October last year after acquiring a 9.9 per cent stake for $1.5bn.

But with markets jittery two weeks ago, Al Khu- dairy said the bank would "absolutely not" provide any more capital to Credit Suisse, for "many reasons" as well as the regulatory obligations that would come with a 10 per cent stake.

Following the interview, investors in the bank took fright, fearing that it might run out of cash, leading to a 30 per cent fall in the bank's share price on the day.

By the end of the week, Credit Suisse's 167-year history as an independent entity came to an abrupt end when it was acquired by UBS for $3bn.

As a result, SNB faces a $1.2bn loss on its investment, although the bank has said this loss would not affect its investment plans. The investment represented just 2.2 per cent of its total investment portfolio.

Discussing the initial investment with the Financial Times last December, Al Khudairy said: "we write cheques of that size frequently, I can assure you. This is just another cheque of that size."

"When was the last time the system allowed for such a venerable global brand to simply keel over?" he said. "That's what it's going to take for us to lose significant money."

Financial institutions from the Middle East have been taking a more prominent role in global banks recently - often backed by national sovereign wealth funds.

SNB's biggest shareholder is the Saudi Public Investment Fund, which is controlled by Crown Prince Mohammed bin Salman.

(c) 2023 City A.M., source Newspaper