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Saad, Algosaibi debts no threat to Saudi banks
Adnan Jaber
 RIYADH: Muhammad
Al-Jasser, governor of Saudi Arabian Monetary Agency (SAMA), said
[Sep 1] that the debts of business conglomerates Saad Group and Ahmad Hamad Algosaibi & Bros did not pose any major threat to Saudi banks.
�There is no systemic risk on the Saudi banking system from the debts of these two firms. Profitability, however, could be affected,�
Al-Jasser told reporters.
Saad and Algosaibi are embroiled in a legal battle in the United States after defaulting on debts, with some bankers warning the total cost of write-downs may hit $22 billion and affect around 120 banks.
The comments are Al-Jasser�s first on the issue since the two groups� problems came to light in late May when SAMA froze the accounts of Saad�s Chairman Maan Al-Sanea, a decision that he has never confirmed or commented upon.
�The government has taken a decision since these two firms may affect the business sector in the Kingdom, and its reputation and position,�
Al-Jasser said. �The government has set up a special committee to look into the two firms, follow the situation of these two firms and take appropriate action.�
The committee is submitting its reports to �the higher authorities in the government,� he added.
He did not provide any additional information.
�These two firms are family-owned, they are not banks licensed by the central bank or the Capital Market Authority. So it is not up to us to deal with the issue of these two firms,�
Al-Jasser added. Algosaibi is suing Al-Sanea for fraud in a case involving allegations of $10 billion in loan irregularities.
�Within the Kingdom, we have not noticed any financial irregularities. We are not responsible for what happens outside the Kingdom,�
Al-Jasser said.
The SAMA governor said he expected �a minor decrease� in profits of Saudi banks in the third quarter of this year.
Source:
Arab News
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