Our round-up of Middle East financial news includes notes on the Saudi-isation of insurance selling in the Kingdom, Algeria's financial difficulties, Morocco's plans to float its local currency, Egyptian inflation, and the DIFC's efforts to attract Trust and Foundation business.
Samba to close branch in London
Samba Financial Group, one of the biggest banks in Saudi Arabia and in the Middle East, is to close its London branch. The decision was made on 8 June. The Board cited concerns over long term profitability as the reason for its closure.
Samba first received a branch license in 1987. Since then, the branch has focussed on private banking, serving corporate clients in the UK and in Saudi Arabia, and deploying through its treasury excess liquidity accumulated at head office.
Arab banks in London have become increasingly concerned about the high costs of regulation and compliance in London and some have complained that the amount of time and expense that they have to devote to these issues is disproportionate to their role within the UK banking system and the UK economy. Many Arab bank branches are funded by deposits collected in their home markets and have little need to collect deposits in the UK. Furthermore, their risk profiles are low and their activities have minimal impact on the British economy.
Commenting on Samba's decision, George Kanaan, the CEO of the Arab Bankers Association, said, "Regulation of Arab banks in London has been relentless and disproportional and it needs to be examined and reviewed before more Arab banks reconsider their positions in London. I will be seeking a meeting with the UK banking authorities to consider what we can do to ensure that London remains an attractive and profitable city in which Arab banks can do business"
More in News
We will hold our Annual General Meeting on Tuesday 31 October at 5.30pm in the Arab Chamber of Commerce Building in Upper Grosvenor Street. All members are encouraged to attend.
Credit Agricole has announced that it will sell half of its stake in Saudi Fransi Bank to Prince Walid al-Talal. The Arab Banker's editor reviews the level of foreign bank ownership in the Saudi banking system.
The Arab Bankers Association sends best wishes to its members and their families on the occassion of Eid al-Adha, the holiday that marks the end of the annual pilgrimage to Mecca.
Gatehouse Bank, the London-based bank that offers Shariah-compliant banking services, delivered a seminar on the UK property market and Shariah-compliant financing to a delegation of students from the University of San Diego on 10 August.