RIYADH, 11 July — The consolidated balance sheet of the 10 Saudi commercial banks has grown by six percent exceeding SR440 billion, while total capitalization is upward of SR50 billion.
This healthy banking environment was created mainly by the increase in oil prices with average oil prices reported to be around $27 per barrel last year compared to an average of $17 per barrel in 1999.
The annual report of AlBank AlSaudi AlFransi (BSF) released here yesterday said that the credit extended to public sector fell by 13 percent in 2000, reflecting improved oil-related cash flows and reduction in short-term borrowing.
The Saudi banks, however, booked over SR115 billion worth of fixed-rate and floating-rate bonds last year compared to SR102 billion in 1999, resulting in a net 9.8 percent increase in banks’ credit to the government.
Referring to the impact of oil prices on the national economy, the report said that the higher oil prices especially during the year 2000 resulted in a growth of 4.1 percent in real GDP and a government budget surplus of approximately SR45 billion for the first time since 1981 in the Kingdom.
“This also led to the reduction of government debt and payment of arrears due to farmers and other contractors”, said the BSF report.
The report, which gives an overview of the Saudi banking sector with special reference to overall performance of the commercial banks, said that the new financial market and credit products were introduced by the local banks, while the advent of Internet as a cost effective delivery channel hastened the development of websites that would serve as portals for future banking activities.
Referring to the performance of the BSF, the report said that the BSF retail banking division initiated a series of projects aimed at improving processing efficiency, delivery capability and quality of services.
This Saud-French joint venture bank also launched a project last year with an aim to update, centralize and electronically store customer legal files documents. This project will be completed by the end of the current year, said the report.
Not only this, BSF is the first bank in the Kingdom to develop a state-of-the-art branch rating system for evaluating the performance of the branches to ensure added efficiency, consistency, objectivity and control of risks for the clients.
The bank currently has a network of 57 branches and 137 automatic teller machines (ATMs) installed at strategic locations.
On Saudization of BSF workforce, the report said that the bank has launched a ‘Corporate Human Resources (CHR) Technology Project’ to be completed by the end of the current year.
The bank, however, has been implementing a complete job evaluation process, leading to the training of 1,218 staff members inside the Kingdom and abroad.
This is in addition to several tailor-made training programs organized by the bank from time to time.