Skip to main content

Saudi National Bank will not increase stake in Credit Suisse after shares drop

Credit Suisse’s financial struggles follow the collapse of Silicon Valley Bank and could likewise have ramifications for the Middle East.
Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on March 15, 2023, in New York City.

The head of Saudi Arabia’s largest bank said on Wednesday that it will not inject more money into the struggling Credit Suisse. 

“Absolutely not, for many reasons,” Saudi National Bank chairman Ammar Al Khudairy told Bloomberg. 

Background: Saudi National Bank (SNB AlAhli) acquired a 9.8% stake in Credit Suisse last October for around $1.5 billion. Based in Zurich, Credit Suisse is one of the largest investment banks in the world. Saudi National Bank, for its part, is the largest commercial bank in the kingdom. 

On Tuesday, the bank said that it found material weaknesses in its financial reporting over the past two years, according to multiple reports. On Wednesday, Credit Suisse’s shares fell more than 20% to a record low on NASDAQ as of 1 p.m. ET, according to market data. 

Khudairy said that increasing their stake in the bank to above 10% would cause new rules to kick in from both Saudi and European regulators. 

“We’re not inclined to get into a new regulatory regime,” he told Bloomberg. 

 

 

Khudairy made similar remarks to Reuters, saying they cannot provide more financial help due to a “regulatory issue.” 

Why it matters: Saudi National Bank may have been able to help Credit Suisse stave off some of its losses had it been inclined to invest more. The Riyadh-based bank had a strong year in 2022, reporting a more than 45% profit increase last year, according to a press release. 

The drop in Credit Suisse's share value is bad news for the Saudi National Bank itself. The stock was worth around double what it traded at on Wednesday when the Saudi bank purchased it. 

Know more: Credit Suisse’s struggles follow authorities in the United States closing Silicon Valley Bank on Friday and Signature Bank on Sunday. Many Israeli tech companies had money in Silicon Valley Bank. The US government ultimately said it would guarantee deposits at both banks.

Update: AFP reported later on Wednesday that Credit Suisse will borrow up to $53.7 billion from the Swiss central bank for support after its shares dropped. 

Join hundreds of Middle East professionals with Al-Monitor PRO.

Business and policy professionals use PRO to monitor the regional economy and improve their reports, memos and presentations. Try it for free and cancel anytime.

Already a Member? Sign in

Free

The Middle East's Best Newsletters

Join over 50,000 readers who access our journalists dedicated newsletters, covering the top political, security, business and tech issues across the region each week.
Delivered straight to your inbox.

Free

What's included:
Our Expertise

Free newsletters available:

  • The Takeaway & Week in Review
  • Middle East Minute (AM)
  • Daily Briefing (PM)
  • Business & Tech Briefing
  • Security Briefing
  • Gulf Briefing
  • Israel Briefing
  • Palestine Briefing
  • Turkey Briefing
  • Iraq Briefing
Expert

Premium Membership

Join the Middle East's most notable experts for premium memos, trend reports, live video Q&A, and intimate in-person events, each detailing exclusive insights on business and geopolitical trends shaping the region.

$25.00 / month
billed annually

Become Member Start with 1-week free trial
What's included:
Our Expertise AI-driven

Memos - premium analytical writing: actionable insights on markets and geopolitics.

Live Video Q&A - Hear from our top journalists and regional experts.

Special Events - Intimate in-person events with business & political VIPs.

Trend Reports - Deep dive analysis on market updates.

Text Alerts - Be the first to get breaking news, exclusives, and PRO content.

All premium Industry Newsletters - Monitor the Middle East's most important industries. Prioritize your target industries for weekly review:

  • Capital Markets & Private Equity
  • Venture Capital & Startups
  • Green Energy
  • Supply Chain
  • Sustainable Development
  • Leading Edge Technology
  • Oil & Gas
  • Real Estate & Construction
  • Banking

We also offer team plans. Please send an email to pro.support@al-monitor.com and we'll onboard your team.

Already a Member? Sign in

Start your PRO membership today.

Join the Middle East's top business and policy professionals to access exclusive PRO insights today.

Join Al-Monitor PRO Start with 1-week free trial