2005 News Story

‘Al-Bilad’ bank offers IPO as commercial banking thrives

The new Saudi Bank ‘Al-Bilad’ has completed preparations for an initial public offering (IPO) starting on February 21, for 30 million of its shares at SR50 [U.S. $13.4] per share. The remaining 30 million shares will go to Saudi banking firms nationwide. The 17-day IPO will involve all local banks and employ nearly 1,400 personnel.

Al-Bilad is Saudi Arabia’s 11th commercial bank, and has a capital of SR3 billion [$0.8 billion]. It is expected to start operations in the middle of this year with 11 branches across the country, to be increased to 30 by the end of 2005, replacing the 200 offices of the eight money exchanges that merged to form the bank. These offices will close only after the opening of the new bank branches.

The establishment of Al-Bilad Bank was approved on June 7, 2004 by the Council of Ministers, which has also approved the licensing of three major international banks to open branches in the Kingdom: Germany’s Deutsche Bank, France’s BNP-Paribas, and JPMorgan-Chase of the United States.

Meanwhile, it was reported yesterday that the existing ten commercial banks in Saudi Arabia have posted combined profits of SR14.7 billion [$3.9 billion] for 2004, registering a 59.7 percent rise compared to their performance in 2003. The National Commercial Bank (NCB), the Kingdom's largest in terms of capital, realized a profit of SR3.53 billion [$0.94 billion] in 2004, SR518 million [$138.32 million] more than the year before, reflecting a growth rate of 17.2 percent. Al-Jazeera Bank, however, registered the highest growth rate, 101 percent, followed by Samba Financial Group 74 percent, Arab National Bank 52 percent, and Al-Rajhi Banking and Investment Corporation, 44 percent. Both the Saudi British Bank and Banque Al-Saudi Al-Fransi recorded a 30 percent increase in their profits, while the Saudi Investment Bank achieved 26.6 percent growth, Riyadh Bank 26 percent, and Saudi Hollandi Bank 24 percent.