Saudi National Bank chairman resigns after Credit Suisse debacle

Hadley, you had your own part to play in this drama, we know. Tell us a little bit more about the announcements this morning, what we know about them, and to what extent this gentleman has had to go because of what happened at Credit Suisse. Well, Jeff, Amar al-Qadiri confirming to me this morning that he has resigned as the chairman of Saudi National Bank. I checked in on him just a few minutes ago, and he told me that he was doing just fine, but remember in terms of the part that he had to play in what we saw happening on March 15th, you remember the morning began with me asking the chairman of Credit Suisse, Assel Lehmann, if he would rule out any form of government assistance going forward, and he told me at that time, listen, we're well-capitalized, we're not even. That isn't even a topic, he told me, of conversation, and just an hour or so later, the chairman of S&B, Amar al-Qadiri, essentially saying there'd be no more money from Saudi Arabia for Credit Suisse. He said there was no reason to do that. He said, we have a 9.

9% stake, regulatory requirements mean that we can't invest further in Credit Suisse. We're happy with what we've done. Unfortunately, the stock fell to its lowest level, and of course this precipitated this UBS buyout of Credit Suisse that we saw in the days following those remarks. Now, we did, of course, have that interview just 24 hours later with Amar al-Qadiri. He tried to roll it back. He essentially said to me that his comments were taken out of context, perhaps even misreported, but once the ball started rolling, he understood that things were going to be very, very difficult to stop. And I think what we've seen evolving over the last several days is a situation with the Saudis have just taken stock.

S&B, the largest lender in Saudi Arabia, is 37% owned by the public investment fund, by the sovereign wealth fund of Saudi Arabia. And as I said to our colleagues in the United States, when someone tells you from the top down you're going to buy a piece of a bank, you're going to do that whether you perhaps think it's a good idea or not. And I think that certainly had a bit to do with this investment by the Saudis. But when you've knocked off a billion of your investments, somebody's got to pay the price, and I think that's what we're seeing today, guys. Yeah, look, Hadley, no one doubts that the kingdom can afford this with their enormous hydrocarbon revenues, but is it going to have an effect on the appetite for Saudis to diversify in the financial sector as well? I mean, it has been a bruising episode all around. Does it have any broader ramifications about the diversification strategy? Honestly, Steve, this is a question that I have been asking multiple times over the last several days to just about every single guest that I've had on and asking also behind the scenes how this is going to impact not only Saudi Arabia's appetite to get more into this space, but also those of the Qataris, the Kuwaitis and the UAE in particular. I mean, is the era of Middle East money injecting itself, if you will, into the financial system over? You've got to remember, of course, that when it comes to Saudi Arabia, they're on par right now with the Chinese when it comes to being a lender.

They're also, of course, invested in the United States, northwards of a trillion dollars, whether it be in equity markets, in banks, also, of course, in investments in the oil and gas space as well. So you've got to understand that you've got to put this in some kind of a context. I don't think this will put a stop to these kinds of investments, but certainly I think that the thinking has changed significantly over the last several days when they've seen just how difficult a couple of comments can make a situation. Just quickly, Hadley, who does that leave as they're ready by them? Because it's not just the Saudis who have been investing from the Gulf States at this point from the Middle East. Does that mean Qatar is still as willing? Others across the region are still as willing? Or are they also concerned about what the Saudis have done here? Well, it's the real question, Karen, of whether it's going to be smart Middle East money or what I have heard analysts call stupid Middle East money, right? Because at the end of the day, there is so much that they want to invest, not just at home in terms of their various diversification plans from Vision 2030 in Saudi Arabia to the moves that they're doing, not only here in Dubai, but also in Abu Dhabi, also Qatar's strategic vision for the country. I don't think that this is going to put a stop to the kind of investments we've seen, because this is that kind of economic diplomacy, soft power that these Gulf Arab countries have been using to their advantage for the last 10 to 20 years. But at the same point, I think you are going to definitely see a move towards smarter investing, if you will.

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