JEDDAH, 30 August 2004 — The National Commercial Bank (NCB) dominates the Kingdom’s investment fund sector by holding the largest share — 44 percent — of total assets of such funds in commercial banks.

Abdulkareem Abu Al-Nasr, deputy general manager and head of consumer banking sector at the NCB, said that out of a total of 168 funds in the Kingdom, the NCB runs 26 funds whose value exceeds SR23 billion. “In the year 2003, the NCB’s profits contributed to this vitality by a rate which surpassed 10 percent,” he said.

The year 2004 is made distinct by a special event for the investment services at the NCB, which celebrated its 25th anniversary since launching the first investment fund in the Kingdom. Abu Al-Nasr attributed this success to the clients’ trust in the bank, and the good strides the funds have made. These funds comply with the changing needs of the client as well as the evolving markets.

Abu Al-Nasr claims that what makes the NCB unique over the past six years has been the innovation of several investment funds which invest in various investment tools, especially domestic ones.

Mohammed Al-Sewilem, marketing manager in the service investment sector at the NCB, says that the NCB funds are divided into two groups:

Open-Ended Funds

These funds do not have a time limit, and the investor is allowed to join and withdraw any time depending on the fund’s evaluation period. Open-ended funds consist of three kinds of funds, which are categorized according to their risk rates. They are the short term, low risk funds that invest in financing Islamic business deals and other monetary tools. Mid range, medium risk funds invest in bonds and merchandise market. And long-term, high-risk funds that invest in international and national stock market.

Closed-Ended Funds

These funds have a determined time frame and are offered for subscription for a set period of time. The investor cannot withdraw till the period of time is completed. The time varies from between 18 and 36 months, depending on the fund. Once there are earnings the capital is returned with the profits to the investors depending on their capital, and henceforth the fund is closed.

And there is a group of investment funds in stocks with almost non-existent risks, which the bank developed in 1996 that guarantees capital. Their number has reached three funds, and in 1999 the bank developed three more funds of this kind to protect capital, under the name of “AlAhli AlMa’moona for Capital Fund”, which are Shariah-compliant.

The NCB is considered the first, if not the only bank from among the Saudi banks to run domestic funds, which invest in industrial, commercial and service sectors in the Kingdom. They were launched for the first time in 1989, the first of which was the AlAhli Installment Fund in cooperation with Abdullateef Jameel Company, which invested in car sales and rent contracts owned by the company. AlAhli Durrat AlAroos Fund followed, investing in the development of the second stage of the Durrat AlAroos project in Jeddah.

In 2003, two funds of the same kind were established, also in cooperation with Abdullateef Jameel Company, for the contract financing of car sales and rent. And they are AlAhli Car Finance Fund (A) and AlAhli Car Finance Fund (B).

In the same year, AlAhli Real Estate Income Fund was established with the cooperation of AlZakri Real Estate Development which invested in the buying of groups of local real estate in Riyadh, Jubail and Yunbu, and then earning their income by renting them to tenants of sound reputation.

The bank is presently establishing a sixth local fund with Omar Qasim AlEsayi Company, which is AlAhli Real Estate Development. It will develop commercial and residential real-estate land and then sell off to buyers. That would provide the investor with the benefit of an increase in capital.

For future projects for marketing in investment services at the bank, Al-Sewilem stated that the bank had begun developing a new service for financial planning, since October 2003. Its aim is to place an investment plan and financial goal for the client based on their future family needs, income and ability to bear the risk. Al-Manara Fund is an investment fund, which is in compliance with the Shariah and distributed in a manner that would suit all investors with consideration to their ability to withstand risk.

Al-Sewilem said that what makes Al-Manara distinct is its capacity to give the investor the opportunity to gain consulting services from a number of global investment managers and consultants from the Wellington for Asset Administration, Dutch Bank, Gulf International Bank and Al-Bakheet Financial Consulting all of which offer technological and financial advice.