RIYADH, 25 October 2005 — The Saudi Arabian Monetary Agency (SAMA) has issued licenses for more banks to enter the Saudi market. They include the National Bank of Kuwait, the National Bank of Bahrain, J.P. Morgan and Deutsche Bank.
This was announced by Mohammed Al-Jasser, deputy governor of SAMA, who said these licenses could go a long way in giving a boost to the economy. He was speaking at the inauguration of the first branch of BNP Paribas in Riyadh, making it the first European bank to make its debut on the Saudi market as a 100 percent foreign bank.
A large number of executives from SAMA and the banking sector, including Baudouin Prot, CEO of the BNP Group, were among those present.
Referring to the issuance of licenses to foreign banks, Al-Jasser said SAMA has set no specific conditions except those normally followed by all the banks. He pointed out that the permission given to these banks has nothing to do with the Kingdom’s bid for accession to the WTO. The banking sector in the Kingdom, the deputy governor said, has remained a force to reckon with in the Middle East by virtue of the presence of foreign banks since 1926. It is thus a continuation of the old policy that predates the birth of the World Trade Organization (WTO).
Addressing a press conference on Sunday night, the BNP chief said that with its international expertise and presence in 85 countries around the world, BNP Paribas will make a strong pitch in Islamic banking, project and corporate finance.
Describing Saudi Arabia as a huge market, Baudouin said the bank would open branches in Jeddah and Al Khobar next year. “We are also looking for a suitable venue for our Riyadh branch,” he said, pointing out that at present they are operating from the 26th floor of Al Faisaliah Tower.
The Riyadh branch has been set up with an initial capital of $25 million, which would be increased to $ 100 million in due course. With enormous resources available at its disposal through its $37 billion parent bank, the BNP Paribas branch in Riyadh would also engage in trade finance, including support for any new venture under the French offset program in the Kingdom as well as large and medium enterprises.
The CEO said the bank has more than 80 trade finance centers all over the world. With a wealth of expertise at its disposal, it could use its leverage in trade finance activities.