S Ara­bia telling for­eign banks to dis­close fi­nances

The Pak Banker - - FRONT PAGE -

JED­DAH: Saudi Ara­bia is telling in­ter­na­tional banks to pub­licly dis­close fi­nan­cial state­ments for the first time as the king­dom's reg­u­la­tor seeks to boost trans­parency.

The Cap­i­tal Mar­kets Au­thor­ity is re­quir­ing fi­nan­cial in­sti­tu­tions it reg­u­lates to pub­lish the in­for­ma­tion on their web­sites from April 1, an of­fi­cial at the Riyadh-based reg­u­la­tor said in an e-mailed re­sponse to ques­tions, with­out giv­ing fur­ther in­for­ma­tion. Banks must also dis­close se­nior ex­ec­u­tives' pay and sig­nif­i­cant risk fac­tors, two peo­ple with knowl­edge of the mat­ter said, ask­ing not to be iden­ti­fied as the mat­ter is pri­vate.

The dis­clo­sure will give in­sight into how much money banks are mak­ing amid a slow­down in eco­nomic growth, as well as the cost of em­ploy­ing top bankers.

The coun­try is one of HSBC Hold­ing Plc's 19 pri­or­ity growth mar­kets, while Deutsche Bank AG said it posted its best-ever per­for­mance in Saudi Ara­bia last year. U.S. banks such as JPMor­gan Chase & Co. and Gold­man Sachs Group Inc. also have a pres­ence in the coun­try, the world's largest oil ex­porter, the big­gest Arab econ­omy, and home to the re­gion's largest stock mar­ket.

The only banks which need to dis­close fi­nan­cial state­ments as of now are the 12 pub­licly traded do­mes­tic lenders reg­u­lated by the Saudi Ara­bian Mon­e­tary Au­thor­ity. En­ti­ties li­censed by the CMA, as the in­vest­ment bank­ing and mar­kets reg­u­la­tor is known, in­clude the units of in­ter­na­tional banks and the in­vest­ment-bank­ing and se­cu­ri­ties arms of lo­cal lenders.

The CMA will be "more ag­gres­sive" in im­ple­ment­ing mar­ket rules and push­ing for greater trans­parency, chair­man Mo­hammed Al-Jadaan said last year. The CMA started a probe into phone com­pany Eti­had Eti­salat for sus­pected vi­o­la­tions of rules re­lated to the dis­clo­sure of fi­nan­cial in­for­ma­tion, mar­ket ma­nip­u­la­tion and in­sider trad­ing last year. The reg­u­la­tor also banned Deloitte LLP from au­dit­ing any listed com­pany in De­cem­ber 2014 af­ter a dis­pute re­lat­ing to its ac­count­ing work for Mo­ham­mad Al-Mo­jil Group, a con­struc­tion-in­dus­try ser­vices provider, peo­ple fa­mil­iar said at the time.

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