17/07/2017
Saudi banks have satisfied the decision of the Basel Committee
on capital adequacy ratio, and even exceeded the required rate at many
stages almost doubled, before the decision is binding on all
international banks by the end of 2019.
According to the analysis of the report unit of Al Eqtisadia
newspaper, based on SAMA data and the financial statements of the Saudi
banks, the capital adequacy ratio for all Saudi banks was 18.84 percent,
while the requirement is 10.5 percent.
With regard to the capital adequacy ratio of each Saudi bank
separately, the analysis of the economic reports unit shows that all
banks have achieved the ratio and prepared it in many ways. The highest
was Al Rajhi Bank with a capital adequacy ratio of 21.24% at the end of
the first quarter of this year.
Followed by Al Enma Bank with 20.81 percent, Al Jazira Bank with
20.33 per cent, Bank Al-Bilad with 19.88 percent and Saudi British Bank
SABB at 19.71 percent.
Samba
Financial Group accounted for 19.24 per cent, followed by Saudi
Investment Bank with 18.93 percent, National Commercial Bank with 18.24
percent, First Bank 17.95 percent followed by Riyad Bank 17.80 , Saudi french (17.67 percent) and Arab Bank (16.33 percent).
Since 1988, the Basel Committee has given fundamental importance
to the adequacy of capital to be binding on all banks operating in the
banking industry as an international or international standard to
indicate the position of the Bank financial position and strengthen
the confidence of depositors.
In Basel, it was recognized that capital adequacy in the
transitional phase of the Convention would be greater or equal to 8 per
cent. Capital adequacy would be calculated from the division of
regulatory capital over assets (risk).
Four
years after the end of the transitional period renewed by the
Commission remained the same percentage, but added to the risk; market
risks, as is the case in Basel II has not changed the planned ratio but has also been added to risk; operational risk.
Basel III has been gradually operationalized by 2015 and continues until 2018 and will enter into force in 2019.
The Saudi Arabian Monetary Agency (Sama) has confirmed the
readiness of Saudi banks to the requirements of the Basel 3 Committee
before the mandatory period to cover liquidity 100 percent, denying the
impact of bank loans due to the application of the standards requested
by the Committee.
"The
Saudi banks have started implementing this standard for several years
without any negative repercussions on the financing of local economic
projects. He pointed that Saudi banks exceeded Compliance requirements for liquidity coverage criteria of 100 percent before the 2018 coverage deadline.
Al Sheikh said that the total assets of the banking sector
amounted to about 2.29 trillion riyals at the end of the first quarter
of 2017, while liquid assets reached 445 billion riyals.
With regard to the goals of the Basel III directives,
Al Sheikh explained that the Basel Committee on Banking Supervision
issued Basel instructions as one of the lessons learned from the
global crisis in 2008. These instructions aim at strengthening the
strength and robustness of banking systems and their ability to absorb
financial and economic shocks.
The
Saudi Arabian Monetary Agency (SAMA) has actively cooperated with
central banks in other countries through Basel Committee task forces to
discuss and study international best practices for liquidity risk
management, which led the Basel Committee to issue joint working papers
and application mechanisms for Basel standard in the liquidity.
SAMA
has started to monitor Basel III standards to cover liquidity in the
banking sector since 2012. The liquidity coverage standard has been
applied in 2013 and its coverage has been very positive after the banks'
100%. He pointed that a technical team from the Basel
Committee on Banking Supervision conducted a visit to SAMA and evaluated
the implementation of this standard in the Kingdom in 2015 with positive results.
