JEDDAH, 28 March 2006 — The Council of Ministers yesterday approved the launch of a new bank with a capital of SR15 billion. The bank, named Inmaa, will sell 70 percent of its shares in an initial public offering (IPO) this year.
According to Finance Minister Ibrahim Al-Assaf, Inmaa will carry out both banking and investment activities. 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 its shares.
The council, which was chaired by Custodian of the Two Holy Mosques King Abdullah, gave instructions to complete the formalities for establishing the bank and for launching the IPO before the end of this year, the Saudi Press Agency reported, quoting Culture and Information Minister Iyad Madani.
The Cabinet took another important decision to boost the stock market as it reduced the share value of joint stock companies from SR50 to SR10. “This change will apply to all joint stock companies that have received licenses,” Madani said.
Al-Assaf said King Abdullah reduced the stake of state-owned funds in the new bank in order to allow citizens to have more shares in the bank.
“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: National Commercial, Riyad, Samba, Al-Rajhi, Saudi-British, Saudi Fransi, Arab National, AlJazira, Saudi Hollandi, Albilad and Saudi Investment. 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 consolidated balance sheet of Saudi commercial banks last year showed an overall increase of 1.7 percent of total assets as they rose from SR735 billion ($196 billion) in October to SR748 billion ($199 billion) in November. Total deposits with SAMA remained unchanged for 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.
The Cabinet meeting also endorsed the rules and regulations related to e-government dealings, Madani said. The new regulations insist that every government department classify its information and data in accordance with specific standards, save its documents electronically, document its administrative procedures accurately and use e-mails and other electronic means for carrying out its activities, he said.
Earlier, Foreign Minister Prince Saud Al-Faisal briefed the Cabinet on the Arab summit, which opens in Khartoum today. The Cabinet hoped that the Khartoum summit would take steps to implement the resolutions taken in the previous summits including measures to improve the working of the Arab League.
