Khaleej Times - 2/4/2006

The Council of Ministers have approved the launch of a new bank with a capital of SR15 billion, named Inmaa.


The bank would sell 70 per cent of its shares in an initial public offering (IPO) this year, according to the Saudi Press Agency (SPA)

It quoted Finance Minister Ibrahim Al Assaf, as saying on Monday that Inmaa would carry out both banking and investment activities. State-owned Public Investment Fund (PFI), Pension Fund (PF), and the General Organisation for Social Insurance (GOSI would have a 30-per cent stake in the bank, with each holding 10 per cent of its shares.

"The government licensed the new bank considering the growing demand for such banking operations as equity participation, cost-plus financing and lease finance," Al Assaf said.

He said Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz reduced the stake of state-owned funds in the new bank in order to allow citizens to have more shares in the bank.

At present there are 11 commercial banks in the Kingdom. They are — National Commercial, Riyad, Saudi American Bank (Samba), Al Rajhi, Saudi-British (SABB) , Saudi Fransi, Arab National, AlJazira, Saudi Hollandi, Albilad and Saudi Investment.

The government has also licensed 10 foreign banks including BNP Paribas, J.P. Morgan, Deutsche Bank, the National Bank of Kuwait, the National Bank of Bahrain, Emirates Bank, Gulf International Bank, State Bank of India and National Bank of Pakistan.

The consolidated balance sheet of Saudi commercial banks last year showed an overall increase of 1.7 percent of total assets. They increased from SR735 billion in October to SR748 billion in November. Total deposits with SAMA remained unchanged for October and November at SR23 billion.

The banks' total deposits jumped from SR469 billion in October to SR477 billion in November.

The Culture and Information Minister Iyad Madame said that the Council meeting, which was chaired by King Abdullah, gave instructions to complete the formalities for establishing the new bank and for launching the IPO before the end of this year.

The Cabinet took another important decision to boost the stock market by reducing the share value of joint stock companies from SR50 to SR10.

"This change will apply to all joint stock companies that have received licences," Madani said.

He said the Cabinet also endorsed the rules and regulations related to e-government dealings.

The new regulations insist that every government department classify its information and data in accordance with specific standards, save its documents electronically, document its administrative procedures accurately and use e-mails and other electronic means for carrying out its activities.