JEDDAH, 14 February 2005 — The new Saudi Bank Albilad has completed all preparations to put 30 million shares up for underwriting starting Feb. 21 for SR50 per share.
The remaining 30 million shares will go to Saudi banking firms all over the Kingdom.
Azzam Aba Al-Khail, the bank’s chief executive officer said in a press statement that the bank has provided some six million applications for the initial public offering.
Aba Al-Khail said that underwriting can be processed through the Internet and tele banking.
He said that the 17-day IPO would include all local banks and that the bank will employ nearly 1,400 personnel, including nationals and foreigners.
The SR3 billion bank, the 11th in the Kingdom, will start operations in the middle of this year with 11 branches across the country. The number of branches would be raised to 30 by the end of this year, he added.
The new Albilad branches will replace the 200 offices of eight money exchanges that merged to form the bank.
The offices of money exchanges will be closed only after the opening of Albilad branches, he told reporters while launching the bank’s emblem.
He said the new bank would be ready to meet all the requirements of clients.
Aba Al-Khail said there was no plan at the moment to increase the bank’s capital. The bank’s founders have paid their full shares in the capital. He expected Albilad’s IPO to exceed the amount realized by that of Ettihad Etisalat.
The Kingdom’s Council of Ministers approved on June 7 the establishment of the new bank.
The move comes after the government licensed three major international banks — Deutsche Bank of Germany, BNP Paribas Bank of France and J.P. Morgan Chase Bank of the United States — to open branches in the Kingdom.
Albilad’s founders will have a 50 percent stake in the bank. Muhammad & Abdullah Ibrahim Al-Subaie Company holds the lion’s share of 42 percent in Al-Bilad Bank while Al-Muqairen Money Exchange holds 18 percent, Al-Rajhi Commercial Foreign Exchange 16 percent, and Al-Rajhi Trading Est. 14 percent.
Other partners Muhammad Saleh Sairafi Est. will have a five percent stake in the bank while Injaz Money Exchange (Yousuf Abdul Wahab Niamatullah Company) will hold three percent, Abdul Mohsen Saleh Al-Amri Est. and Ali Hazza & Partners for Trade and Money Exchange one percent each, press reports said.
Saudi Arabia has 10 commercial banks with assets exceeding $100 billion.
The recent offerings of shares in Etisalat and National Company for Cooperative Insurance (NCCI) showed a hunger for shares in Saudi Arabia, where government coffers are bursting with windfall oil revenues and many investors are hunting for opportunities.
Saudi stocks have risen sharply in the past two years on the back of high oil prices, which have pumped money into the world’s biggest oil exporter.
Saudi shares surged to fresh highs on Saturday, boosted by strong oil prices and expectations of continued first-quarter corporate growth, bankers said. The official share index reached an intraday high of 8,634 points before easing to close at 8,622 points, still up a healthy 2.61 percent from Thursday’s record close. The stock index closed at 8,553.09 points yesterday.
Saudi Arabia has already been reaping the benefits of high oil prices in the last two years. Major banks, petrochemical and telecommunications firms all reported strong growth in 2004.
