Everything fine at Credit Suisse, says top stakeholder Saudi National Bank

As Credit Suisse made a strong comeback after the announcement of Swiss Bank’s $54 billion lifeline, the chief of its top stakeholder, Saudi National Bank had said that the bank is generally “sound.”

In his interview with CNBC, Al Khudairy, the chief of the Saudi National Bank also recalled the stance of Swiss National Bank on Wednesday. 

Also Read: Credit Suisse is more relevant to India’s financial system than SVB: Jefferies

“If you look at what even the Swiss National Bank said yesterday with all the ratios, they’re all sound, everything is fine,” said Ammar Al Khudairy on Thursday. “I don’t think they’ll need more capital,” he added.

Also Read: ‘Focus on facts and reinforce bank’s strengths’ Credit Suisse CEO tells staffs

Notably, Al Khudairy’s comments on the Credit Suisse bank of how his institution wouldn’t make anymore investment on the bank sparked a sharp fall in Credit Suisse’s shares at the stock market. Within a single day, the shares of the Zurich-based firm plunged by 30%. 

Also Read: Why stock market has been falling? Experts list out triggers for trend reversal

However, he made sure to mention in his comments that his institution couldn’t make investment in the bank due to regulatory reasons. After the fall in shares, Swiss bank had to step in and issue a show of support and a credit line of up to 50 billion Swiss franc ($54 billion). 

Al Khudairy also noted that the market panic around the financial stocks in last one day was “completely unwarranted.”

“Markets are skittish and they’re looking for stories or things that validate concern,” he said. He also added that the Saudi National Bank didn’t even had any discussion with Credit Suisse about increasing the 9.9% stake that his institution holds. 

“We were never asked, and to my knowledge, there has never been any assistance sought,” Al Khudairy said. He also mentioned how regulatory constraints would make it difficult to increase the stake in the bank above 10% as that remains a “red line”

(With agency inputs)

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