Saudi Banks Slience! Transparency Issue?

Ma'an Al-Sana'a

Ma'an Al-Sana'a

Over six months ago, several creditors (banks) around the world announced their exposure to SAAD group especially to the SICL the financial unit of that group registered on Cayman Islands somewhere on the Caribbean owned by Saudi Billionaire Ma’an Al-San’a. Yet, he dragged his in laws (his wife’s family) al-Gosaibi group into a dirty sum of loans.

Day after day passes by and the Saudi officials at SAMA are denying to comments anything toward this problem.

Besides, All banks in Saudi have not announce or comment any exposure relating to the total debt amounts that are claiming these two family groups. The rumors and turmoil continued increasingly between the investors since SAMA did not want to speak and inform these people about what is exactly going on! Suddenly, SAMA has freeze down all SAAD group assets in Saudi and few days later Ma’an’s name disappeared from the shareholders holding stakes of 5 percent or more in Samba Financial Group and weeks later it was announced that these banks are in better financial situation after the settlement.

Nowadays, the same scenario is happening again, Dubai World is owned by Dubai government facing a very concerning financial issue due to the huge number of loans and liquidity problem.

Dubai WOrld Logo

Dubai WOrld Logo

Is any financial Saudi firm involved? Yes, but very minimal and less than 0.2% according to Al-Jaser SAMA governor.

According to the report, the Saudi Arabian Monetary Authority (SAMA) estimates local banks’ exposure to Dubai World at just 0.2 percent of total assets.

It adds it is possible for some Saudi banks to hold the Islamic bond, or sukuk, issued by indebted Dubai World affiliate Nakheel, which is due to mature on December 14, but this will only be a small proportion of their total investment portfolio, the paper reports.

Dubai World asked on November 25 to delay repayment of $26bn of debt belonging to Nakheel and Limitless as part of restructuring plans.

“We do not expect serious direct fallout on the Saudi economy,” the report said. “Companies working on projects in Dubai may see some impact and questions are likely to be raised about the projects that Dubai government-backed enterprises are working on in the kingdom.”

According to the report, the only project being undertaken in Saudi is Limitless’ $12bn Al-Wasl development in north Riyadh. Infrastructure is currently being constructed on the project.

Since the exposure is very narrow, why don’t you declare it?

As of today, the Saudi stock market TASI has lost over 300 points due to that silence by SAMA. TASI has lost 2.6% about 161.35 points today and God knows when would it stops?

I strongly believe, if we enhance our Judicial system and Governance commercially, so much investments will be flowing to Saudi…

Are you listening?

Lets enjoy SAMA’s transparency!

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2 thoughts on “Saudi Banks Slience! Transparency Issue?

  1. Transparency is the single biggest factor impeding business growth and the development of dynamic economies in the ME

    The latest Dubai problem only reinforces the risk associated with doing business in KSA or the UAE.  Recovering from this latest episode will take time. 

  2. Mr. Mike,

    The ME markets are still experiencing the maturity stage

    Lets watch the outcome of the current chaos

    and hopes that these officials will get the message clear overall.

    Thanks for dropping by!

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