The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Sama sees no problems for the banks

“These people aren’t really rich,” the manager at one office tells Euromoney, “their net worth might be as little as $5 million to $10 million.

Stock market crash obscures Saudi boom

Opening the doors to the kingdom

Muhammad Al-Jasser, vice governor of the Saudi Arabian Monetary Agency, must be glad he doesn’t have to worry about the stock market and its recent fall except to the extent that it might have an effect on the banking system. Apparently he has been sleeping soundly. “The banking system is not facing any systemic risk as a result of the events in the stock market,” Al-Jasser tells Euromoney.

The Saudi banks have been heavily involved in the stock market boom both as providers of the retail technology to enable mass participation – Sama prodded them into this – and as lenders to stock market investors. Riyadh banking circles are awash with, possibly apocryphal, stories of retail customers buying goods such as cars with consumer loans from the banks, immediately selling them and stuffing the cash into the stock market as it boomed earlier this year. Now it has crashed.

Consumer lending is well-regulated and limited to debt service at a maximum of one third of salary. If customers are borrowing to invest in the stock market, collateral has to be 200% of loan value and they have to release shares to the banks.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree