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Banking

Saudi Arabia considers three new banking licences

Applications to operate banks in Saudi Arabia show that consolidation has not shut the door to new entrants.

The Saudi Arabian Monetary Authority (SAMA) is processing applications for three new banking licences in the country, showing scope for more banks to open in Saudi despite ongoing consolidation in the sector, its deputy governor said on Thursday.

Two are applications for traditional banking licences and one for a digital bank, according to Fahad Alshathri, deputy governor for supervision at SAMA, who was speaking on the sidelines of Euromoney’s Saudi Arabia conference in Riyadh.

Sector consolidation is a key focus across the Gulf, and Saudi Arabia is no exception. Earlier, Saudi British Bank (Sabb) and Alawwal completed the first bank merger in the country, while National Commercial Bank and Riyadh Bank are in ongoing talks.

However, Alshathri said that consolidation did not mean there was no room for new banks in Saudi. SAMA has already approved two new banking licences for Credit Suisse and Standard Chartered this year, as well as the three it is currently considering.

Speaking to bankers and investors at the conference, Alshathri noted that financial integration must make sense from both a market and a regulatory perspective. When evaluating the possibility of future mergers, he said that if there was value to be added, an integration would be considered.

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