Saudi Arabia: Bank Bad Loans Surge to SR5.8 Billion in '06 |
|
JEDDAH, 8 May 2007 -- Saudi banks have incurred an estimated loss of SR5.8 billion last year due to bad debts and loan defaults, Hassan Al-Maghribi, an economist at the Saudi Investment Bank, said recently. The total of bad debts increased by SR1 billion in 2006 from the amount posted in 2005.
"The bad debt phenomenon occurs in the Kingdom largely because of the widespread public practice of investing their money in the share market, which has been suffering serious upheavals particularly last year," he told Arab News.
Maghribi attributed the increase in the volume of bad debts to the simplified loan formalities and credit facilities at banks that have made getting loans easy for customers.
The simplification of credit facilities is aimed at helping customers and strengthening economic activities.
A loan is classified as defaulting when the individual or establishment delays or neglects to repay the loans for a period of three months from the required date.
Maghribi added though that the current volume of bad debt in the Kingdom has not reached an alarming rate, as the total volume of personal loans was estimated at SR188 billion. The number of the people who neglected the repayment of their loans was significantly low five years ago.
The banks and other credit companies want to have some laws in place to contain this negative phenomenon, which might pose a serious threat if not tackled before it goes out of control.
Maghribi noted that most of the debtors who failed to return their loans were from the middle class government officials. He said bad debts mostly ranged between SR50,000 and SR1.5 million.
Social, occupational and economic reasons, besides unwise investments without proper knowledge about the companies listed in the share markets, were also the other reasons why some people lost in the stock market, which in turn led to loan defaults, he said.
By Galal Fakkar
© Arab News 2007
-
Zawya encourages you to add a comment to this discussion. You agree that when you add content to this discussion your comments will not:
1.1 Contain any material which is libelous or defamatory of any person, is obscene, offensive, hateful or inflammatory or causes damage to the reputation of any person or organisation.
1.2 Promote sexually explicit material, violence, discrimination based on race, sex, religion, nationality, disability, sexual orientation or age or any illegal activity.
1.3 Be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence.
1.4 Be threatening, abuse or invade another's privacy, or cause annoyance, inconvenience or needless anxiety.
1.5 Be used to impersonate any person, to misrepresent your identity or affiliation with any person, or be likely to deceive any person.
1.6 Give the impression that they represent Zawya.
1.7 Advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse. - The content posted on www.zawya.com is created by members of the public. The views expressed are theirs and unless specifically stated are not those of Zawya. Zawya reserves the right to review all comments prior to posting and edit or delete any contribution, but Zawya is not responsible for and can not be held liable for any content posted by members of the public on www.zawya.com.
- Zawya is not responsible for the availability or content of any third party sites that are accessible through www.zawya.com. Any links to third party websites from www.zawya.com do not amount to any endorsement of that site by Zawya and any use of that site by you is at your own risk.
- By submitting your comment, you hereby give Zawya the right, but not the obligation, to post, air, edit, exhibit, telecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comments worldwide, in perpetuity.

from issuers in both public and private sectors. It is not an e-tendering service and is entirely FREE.
As an Issuer, you can benefit from posting an unlimited number of Tender
Notices for FREE and reaching out to an online community of bidders.
The service also offers you a tool to track the interest of bidders to your
tenders 'live' online.
| Tender Notice | Due Date |
Stories
Companies
| Company Name | Country | Industry |
| Saudi Binladin Group | Saudi Arabia | Construction and Design |
| Saudi Telecom | Saudi Arabia | Telecommunications Services |
| Consolidated Contractors Company | Overseas | Construction and Design |
| Saudi Electricity Company | Saudi Arabia | Electric Utilities |
| Al Rajhi Bank | Saudi Arabia | Banking |
| Saudi Basic Industries Corporation | Saudi Arabia | Petrochemicals |
| Emirates Airline | UAE | Transportation Services |
| Damas Jewellery | UAE | Specialized Retailers |
| Investment Corporation of Dubai | UAE | Investment Firms and Funds |
| Pepsi Cola International (Middle East) | Region-wide | Beverages |
Projects
| Project Name | Country | Sector |
| Takreer - Ruwais Refinery Expansion | UAE | Oil and Gas |
| ENEC - Nuclear Power Plant | UAE | Power and Water |
| Emirates Aluminium (EMAL) - Smelter Complex - Phase 1 | UAE | Industry |
| SATORP - Jubail Refinery and Petrochemical Complex | Saudi Arabia | Oil and Gas |
| Dubai RTA - Dubai Metro | UAE | Infrastructure |
| ADNOC/ConocoPhillips - Sour Gas Fields Development - Shah Field | UAE | Oil and Gas |
| Qatar Foundation - Sidra Medical and Research Center | Qatar | Real Estate |
| SATORP- Jubail Refinery and Petrochemical Complex - Conversion Unit and Sulphur Package (Part 2) | Saudi Arabia | Oil and Gas |
| Abu Dhabi DOT - Abu Dhabi Metro | UAE | Infrastructure |
| Takreer - Ruwais Refinery Expansion - Offsites and Utilities Package | UAE | Oil and Gas |






Loading ...