We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Mon 24 Jan 2011 04:49 PM

Font Size

- Aa +

Saudi banks won't need state bailout, says CenBank governor

SAMA chief Mohammad Al Jasser said banks had sufficient provisions to shield against bad loans

Saudi banks won't need state bailout, says CenBank governor
CENBANK HEAD: Al Jasser last week said that Saudi banks had taken enough measures to shield themselves against bad loans and said there was no need to raise provisions (Getty Images)
Saudi banks won't need state bailout, says CenBank governor
SLOW START: Al-Jasser said Saudi would begin small with its wealth fund so as to avoid any backlash. (Getty Images)
Saudi banks won't need state bailout, says CenBank governor
INFLATION PROBLEM Saudi is worried that a global rise in food prices may drive up inflation but remains committed to its dollar currency peg (Getty Images)

Saudi
Arabia has not bailed out any of its banks or financial institutions and has no
plans to do so, the governor of Saudi Arabian Monetary Agency said on Monday.

"Saudi
Arabia is one of the very few countries in the world that did not need at all
to bail out our financial institutions or even try and go to clean up their
portfolios," Mohammad Al Jasser said on the sidelines of an event in
Riyadh.

"We
didn't need to do any of that because we acted counter-cyclically before the
crisis hit and I promise to keep it that way.”

Most
banks in the Arab world’s largest economy posted solid fourth quarter results,
with several above analysts’ average forecasts after booking provisions in the
third quarter.

Al
Jasser last week said that Saudi banks had taken enough measures to shield
themselves against bad loans and said there was no need to raise provisions.

"It's
clear that when bad loans go down, then provisions go down as well so banks
undertook less ... in the fourth quarter," Al Jasser told Saudi-owned Al
Arabiya television.

"They
have taken enough... to tackle any situation now," he said, adding that he
saw no need for "big" provisions.

Jasser
said in October that provisions for bad loans should exceed 100 percent of the
debt’s value.

The
banking sector of the world's largest oil exporter has been hit by debt
restructuring in family-owned businesses in the past.

As
a result, lending growth stalled in December 2009 but it has been picking up
slowly over the past few months.

 

Arabian Business: why we're going behind a paywall