Eight partners, who are also the founders, have signed an agreement, according to which, the new Al Bilad Bank is to be established with SR 3 billion in capital. The founders are investing SR 1.5 billion of their own funds in the capitalization of the new bank. The remaining SR 1.5 billion will be collected through floating shares for the general public to subscribe.
The founders who signed the agreement include: Mohammed & Abdullah Ibrahim Al Sabie'ee Co. for Foreign Exchange, the heirs of Abdul Aziz Bin Sulaiman Al Muqairen, Al Rajhi Trading Est., Al Rajhi Foreign Exchange Est., Mohammed Saleh Sairafi Est., Yousuf Abdul Wahab Nematullah Foreign Exchange (Injaz Foreign Exchange), Abdul Mohsen Saleh Al Omri Est. and Ali Hazza & Co. for General Trading & Foreign Exchange.
The new bank is expected to begin operations in the second quarter of 2005. Its main office and headquarters will be in Riyadh and it will have branches all over the Kingdom. The Bank is being established in line with the Royal directives for the amalgamation of various firms dealing in foreign exchange into one bank.
The signing of the agreement by the founders is considered to be the one main step for the completion of the other legal procedures for the bank to begin operations. The amalgamation was also contemplated in the deliberations of the Ministerial Council meeting in June this year, after which the Ministry of Commerce and Industry initiated its coordination work with the Saudi Arabian Monetary Agency (SAMA) which led to the signing of the founding agreement. The basic charter of the new bank has also been submitted for the approval of the Government.
The Council of Ministers, presided over by the Custodian of the Two Holy Mosques, has already approved the amalgamation of foreign exchange firms, operating in Saudi Arabia, into one entity, to become a unified foreign exchange company, with capitalization amounting to SR 3 billion divided into 60 million shares of SR 50 each.
The single foreign exchange firm thus formed will act similar to a bank and will operate according to Islamic principles. It will offer new customer-friendly services and will be an estimable addition to the Saudi Arabian banking sector.
It is expected that the new bank will concentrate on professionalism and the latest technology for the provision of all types of banking and foreign exchange services on international standards.
© Saudi Economic Survey 2004
