JEDDAH, 5 October 2006 — The National Commercial Bank (NCB) is ready to sell part of its shares in an initial public offering, according to Abdullah Bahamdan, chairman of the bank.
In comments published yesterday, Bahamdan, however, said NCB had not yet fixed a date for the IPO. “NCB in its present form is ready for public subscription,” he said. “The final decision on this matter must be taken by the main shareholders, most importantly the Public Investment Fund (PIF),” Al-Jazirah Arabic daily quoted the chairman as saying.
Sources are unsure how many shares NCB will sell in the IPO but they estimate that some 30 to 40 percent of state-owned PIF shares will be offered for sale. Some 69.3 percent of NCB shares are owned by PIF.
NCB recorded a net income of SR3.34 billion for the first six months of 2006, an increase of SR908 million or 37.4 percent over the same period in 2005.
NCB’s total operating income also grew by 45.7 percent to SR4.98 billion during the first half of this year compared to SR3.42 billion in the same period of last year. Total assets of the bank rose by 11.3 percent to SR155.07 billion compared with first half of 2005, net loans and advances increased to SR75.93 billion, an increase of 5.7 percent. Customer deposits rose by 12.8 percent to reach SR116.99 billion.
NCB’s total shareholder equity grew by 22.6 percent to SR22.27 billion and the ratio of equity to assets stood at a robust 14.4 percent, thus reinforcing its strong capital adequacy ratio and supported by maintaining continuous improvement in profitability.
The bank continued to maintain its high profitability ratios as return on average assets increased to 4.4 percent and the return on average equity was 30.4 percent while earnings per share improved from SR2.70 to SR3.71.
The bank’s general assembly decided to increase its paid-in capital from SR6 billion to SR9 billion by capitalizing SR3 billion from general reserves to paid-in capital through issuance of one bonus share for every two shares.
The bank had 255 branches at the end of 2005 compared to 246 in 2004. The number of ATMs was 942 by 2005 and number of sales outlets 6,950. NCB converted 66 new branches into Shariah-compliant in 2005, thus bringing the total number of these branches to 234.
NCB was the first bank established in Saudi Arabia in 1953 under a Royal Decree issued by King Abdul Aziz which converted the partnership of Saleh & Abdul Aziz Kaki and Salem Bin Mahfouz into NCB.