When long-term Credit Suisse investor Harris Associates shrewdly began in October to dump overboard the entirety of its nearly 10% stake in the bank amid jitters in its stock price, the state-controlled Saudi lender poured fresh money into CS as part of a 4-billion-franc capital hike orchestrated by new CEO Ulrich Körner later that month. 

It was to prove a disastrous decision—in no small part thanks to the Saudi bankers themselves. 

Now the man behind the deal, SNB chairman Ammar Al Khudairy, has resigned to be replaced by his CEO, Saeed Mohammed Al Ghamdi. The move, effective Monday, was due to “personal reasons,” according to a statement cited by Bloomberg.

But Al Khudairy may only have himself to blame for Credit Suisse’s demise.

In a brief interview with Bloomberg on March 15, the SNB chairman sparked a mass panic among Credit Suisse investors after asserting that his bank was “absolutely not” prepared to further raise its nearly 10% stake. 

After his comments on Credit Suisse helped spark a slump in the lender’s shares, Saudi National Bank Chairman Ammar Al Khudairy resigns https://t.co/9aaWunmcFT pic.twitter.com/RpqLCQwpMg

— Bloomberg (@business) March 27, 2023

While Al Khudairy explained this was actually due to thorny regulatory issues that would take effect should its holding surpass a tenth of the Swiss bank’s outstanding shares, the emphatic nature with which he ruled out any further capital injection led to a rout in Credit Suisse stock.

Confidence in the bank evaporated overnight following Al Khudairy’s comment

Credit Suisse plunged as much as 24% following the comments from Al Khudairy, which obliterated any last chance Credit Suisse CEO Körner had at still saving his bank.

The very next day, on March 16, the SNB chairman attempted to repair some of the harm he had caused, called the stock losses “unwarranted.” The damage, however, was already done. 

Swiss officials later confirmed that the market’s confidence in the bank had evaporated entirely by that point, forcing them to begin in secret the drafting of emergency legislation to enable a rescue of the bank. 

The deal, announced on Sunday evening prior to the market’s open, brings to an end Credit Suisse’s more than 166 years of history as an independent bank.

UBS plans to acquire 100% of its crosstown rival for the bargain price of just 3 billion francs—only twice what the Saudis paid for their 9.9% stake.

The huge hit to the CS stock price will likely cost SNB roughly $1.2 billion in losses on its investment. 

Born in 1963, Al Khudairy spent his career in Saudi Arabia’s financial sector running some of the kingdom’s top institutions. He’d been chairman of Goldman Sachs Group Inc. and Morgan Stanley in Saudi Arabia.

He became chairman of Saudi National Bank, when the Gulf state’s largest commercial lender was created through the merger of National Commercial Bank with smaller peer Samba Financial Group. It is controlled through the monarchy’s sovereign wealth fund Public Investment Fund.