JEDDAH, 7 June 2006 — Seventy percent of shares of the newly formed Inmaa Bank that has a capital of SR15 billion will be available for Saudi citizens to purchase by the last quarter of this year, it was announced yesterday.
This is set to be the largest Initial Public Offering (IPO) in the Kingdom’s history. “The bank’s founders have fully deposited their shares in its account and an agreement for its establishment has been documented in preparation for the IPO,” Finance Minister Ibrahim Al-Assaf told the Saudi Press Agency.
State-owned Public Investment Fund, Pension Fund and the General Organization for Social Insurance will have a 30 percent stake in the bank, with each holding 10 percent of shares.
“The procedures for the establishment of the bank and launch of the IPO are progressing well,” the minister said. Custodian of the Two Holy Mosques King Abdullah issued a royal decree on March 28 giving his approval to establishing the bank.
The constituent committee has invited tenders from well-known consultancy firms to appoint a financial adviser to set out a working plan and strategy for the bank as well as to draft its internal regulations, Al-Assaf said.
The minister said Inmaa would carry out both banking and investment activities. He also announced the appointment of Abdul Mohsen ibn Abdul Aziz Al-Faris as the bank’s chief executive.
Al-Faris holds a master’s degree in accounting and is a fellow of the American Institute of Auditors. Al-Faris has a vast portfolio of experience in financial and banking activities through his work at the Saudi Arabian Monetary Agency and the Abdul Latif Jameel Group, where he was the executive director of financial services.
Al-Assaf said King Abdullah reduced the stake of state-owned funds in the new bank in order to allow citizens to have a greater share. “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.
At present there are 11 commercial banks in the Kingdom. They are the National Commercial, Riyad, Samba, Al-Rajhi, Saudi-British, Saudi Fransi, Arab National, Aljazira, Saudi Hollandi, Albilad and Saudi Investment banks.
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 total assets of Saudi commercial banks rose from SR735 billion ($196 billion) in October 2005 to SR748 billion ($199 billion) in November 2005. Total deposits with SAMA remained unchanged during October and November at SR23 billion ($6 billion). The banks’ total deposits jumped from SR469 billion ($125 billion) in October to SR477 billion ($127 billion) in November 2005.