RIYADH: British Trade Minister Lord Davies said that in his talks with Ibrahim Al-Assaf, finance minister, and Muhammad Al-Jasser, governor of Saudi Arabian Monetary Agency (SAMA) he had discussed the issue of the Saad Group and Ahmad Hamad Algosaibi & Bros (Ahab) which owe $20 billion to local and foreign banks. Asked about the defaulting Saudi businesses that are allegedly favoring local banks but not foreign creditors, Lord Davies said, “I have strong confidence in the Saudi economy as well as in the economy of the Gulf. In Saudi Arabia, there is a high degree of optimism and huge opportunity for businesses.” Lord Davies was speaking at a press conference after launching the “Soft Landing Program” at the Kingdom Tower.
The Soft Landing Program is a collaboration of previous partners working with UK Trade and Investment to assist British businesses to establish their presence in the Kingdom. The UK trade and investment team at the British Embassy, within the framework of this program, will collaborate in the delivery of a wide range of services, while facilitating access to business opportunities in the two countries.
According to reports appearing in a section of British press, Lord Davies visited the Kingdom to defuse the growing dispute involving British banks and the two Saudi conglomerates.
According to the reports, the state-owned Royal Bank of Scotland, HSBC and Standard Chartered are all understood to have had extensive exposure to the Saad Group and Ahab. Dozens of other Western banks are also owed money, including Citigroup and BNP Paribas. Bankers suspect that the two family-owned Saudi businesses, which defaulted in the summer, have privately reached agreements with local Saudi banks about restructuring their loans while leaving foreign banks in the cold.
Asked about other issues discussed during his meeting with Al-Assaf and Al-Jasser, Lord Davies said, “We discussed the international economic situation and the G-20 efforts to contain its consequences. In the UK, we have stabilized the banking sector,” said the British minister, adding that the three also reviewed economic developments between the two countries and ways of further strengthening their economic ties. Saudi British trade is currently worth SR37 billion (£6 billion) a year.
