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The forum "The Best Governance Practices for Combating Corruption in Family Businesses,” was held at the headquarters of the Council of Saudi Chambers in Riyadh. Representatives of a number of international organizations and CEOs of family businesses participated, among others. Speakers at the forum said serious efforts are needed to bring the concept of good governance to family-run businesses in the Kingdom. It was called for generalizing the culture of good governance in private sector firms as well as in government institutions, commissions and ministries and all civil society institutions. Good governance culture should prevail not only in financial aspects, but in all legal, administrative and financial work that combats corruption of all kinds.

The volume of finance provided by Saudi banks to Kafala-supported small and medium enterprises (SMEs) grew by 28 percent to SR 571.8m in the first quarter of 2014 compared to SR 448.3m in the same period last year. The Kafala Program, meanwhile, issued 652 guarantees for SME projects in Q1, an increase of 34 percent compared to Q1 last year. The value of those guarantees stood at SR 311.6 million. The National Commercial Bank ( NCB ) ranked top supporter to the Kafala Program during the first quarter of the year at 36 percent of the total guarantees, followed by Riyad Bank (22 percent), Rajhi Bank (17 percent), Saudi Hollandi Bank and Samba Financial Group (5 percent for each), whereas the remaining 15 percent of finance went to other banks.

Arab Petroleum Investments Corporation (APICORP), the multilateral development bank of the 10 member states of the Organization of Arab Petroleum Exporting Countries (OAPEC), has closed a five-year SR1 billion ($267 million) bilateral Shari’ah-compliant facility with Al Rajhi Bank. The facility is aimed at retaining and increasing APICORP’s medium-term funding. Al Rajhi Bank was the sole Murabaha Facility Arranger, Lender and Agent. APICORP enjoys a foreign currency issuer rating of Aa3 for long-term debt and Prime-1 for its short-term debt with stable outlook from Moody’s Investors Service. Al Rajhi Bank is the largest retail bank in KSA with total assets of SR279 billion ($74.4 billion).

Saudi Arabia's national home finance company, Bidaya, may open its doors by the end of this year. In development since 2010, the company is a venture between the finance ministry's Public Investment Fund and the Jeddah-based Islamic Corporation for the Development of the Private Sector (ICD). Bidaya is in its last phase of development prior to launch and will submit an application for a licence as soon as regulations under the kingdom's mortgage laws are finalised. The "target size" of its paid-up capital will reportedly be 900 million riyals ($240 million). Bidaya will increase access to finance for middle-income home buyers across the Kingdom and thus, raise low levels of home ownership in the country.

A meeting of the 58th session of the Permanent Council of the Islamic Solidarity Fund of the Organization of Islamic Cooperation reviewed the current financial situation of the Fund and the projects it is executing for member states and Muslim communities in non-OIC member states. OIC Secretary General Iyad Ameen Madani called for the mobilization of support for the ISF to overcome the limitation of resources in the face of growing needs, adding that many humanitarian issues were awaiting the attention of the Fund. He called for the establishment of a work group to identify projects for the ISF and unify efforts. The ISF has so far built 2,418 projects at a cost of $207 million in 130 countries throughout the world.

Standard & Poor's Ratings Services has affirmed at 'BBB' its insurer financial strength and counterparty credit ratings on Saudi Arabia-based Weqaya Takaful Insurance and Reinsurance Co. (Weqaya) but the outlook is negative. The affirmation reflects S&P’s view that despite a comprehensive net loss of Saudi Arabian riyal (SAR) 90.7 million ($24.2 million) for 2013 Weqaya's new senior management is taking appropriate remedial action. Consequently, policyholder confidence will be maintained and Weqaya will continue to enjoy both a satisfactory business risk profile, and at least a lower adequate financial risk profile. The negative outlook reflects S&P's belief that senior management at Weqaya must continue to work quickly and effectively to reinforce capital and earnings.

Al Rajhi Bankk is losing ground to peers in Saudi Arabia, its home market, as slowing credit growth and intensifying competition for retail customers weigh on earnings. The world’s biggest Islamic bank said this week that first-quarter profit fell 17% from a year earlier, its third quarter of declining earnings. Lending growth in the three months slowed to 7% from 19% in the same period of 2013. That compares with 30% for Bank Albilad and 11% for Samba Financial Group. Profit at the Riyadh-based bank is slowing even as the Saudi economy is poised to grow 4.2% this year, because rival banks are increasingly turning their attention to retail customers as new labour laws stifle construction projects. Construction lending accounted for 7.7% of total bank loans in 2013.

The Saudi Electricity Co (SEC) has successfully managed to price and allocate two global sukuk, worth $2.5bn (SR9.37bn). The bonds were reportedly issued in two separate tranches: The first is a $1.5bn 10-year bond at a rate of 4% and the second is a $1bn 30-year note at 5.5%. Subscription to the bonds reached $12.5bn, or five times of the required fund.

A group of Saudi Arabian lenders has rejected an invitation from Ahmad Hamad Algosaibi & Brothers Co. to attend a meeting next month to discuss their claims on $5.9 billion of debt. The banks have no interest in attending the meeting proposed, according to a letter to Algosaibi from a law firm representing the unnamed Saudi lenders. The letter, dated April 3, didn’t give a reason why the banks don’t want to attend. Algosaibi and billionaire Maan al-Sanea’s Saad Group missed payments on at least $15.7 billion of debt in 2009 in the Middle East’s biggest default, as the global financial crisis froze credit markets and asset prices slumped. The two family holding companies, which are related by marital ties, have been locked in legal disputes ever since.

Murabaha Company inked a deal with Saudi-Kuwaiti Finance House (KFH-Saudi) to serve as its financial advisor, in order to plan and take steps towards the company’s goal to offer 30% of its shares for public offering. KFH-Saudi CEO Tarek Al-Rekheimi said that the bank will, according to this agreement, offer all financial consultations regarding the evaluation of the company, and the preparation of all documents, as per regulations. He went on to say that the bank works with several Saudi corporations to enlist them in the Saudi market during the coming period. He stressed that the increase in number of companies expected to be offered during the coming period, will play a significant role in reinforcing the Saudi bourse, not to mention opening commercial and financial channels for those companies, in order to diversify forms of financing.

Ahmad Hamad Algosaibi & Brothers Co. invited creditors including BNP Paribas SA (BNP) and Standard Chartered Plc to discuss claims on $5.9 billion of debt as it seeks to recover from the Middle East’s biggest default. The Saudi Arabian company will outline proposals aimed at achieving a comprehensive settlement with more than 70 creditors at a May 7 meeting in Dubai. The company didn’t give further details on the proposed terms. Banks rejected an original debt restructuring proposal from Algosaibi four years ago. Algosaibi hired Simon Charlton, former head of forensic services in the Middle East for Deloitte LLP, as chief restructuring officer and Ben Jones, also from Deloitte, as chief financial officer last June to restructure its operations.

Saudi investment and asset management firm Alkhabeer Capital has hosted a roundtable on ‘Family Businesses and Private Equity’ in Jeddah. The event was attended by clients, partners and a select group of prominent industry leaders and was chaired by keynote speaker, Dr. Benoit Leleux, a professor of Entrepreneurship and Finance at IMD Business School in Switzerland. Dr. Leleux presented two key sessions which addressed the relationship between private equity and family businesses, the first titled “Family Business and Private Equity – Valuable Partnership or Conflicts of Interest” and the second addressed “The Impact of Governance and Presence of Non-Family Executives on Family Businesses’ Entrepreneurial Wealth Creation”.

A cooperation agreement between the bourses of Malaysia and Saudi Arabia – the world's two largest Islamic financial services markets – stands to help the industry grow at a greater clip in both countries. The deal, signed on February 20, will see the exchanges in Kuala Lumpur and Riyadh share expertise and develop human resources jointly. It covers topics such as equities, mutual funds and sukuk. Combined, Malaysia and Saudi Arabia hold $682bn in Islamic banking assets. The Saudi exchange, Tadawul, lists the world’s biggest Islamic banks, while Bursa Malaysia hosts the largest and most liquid market for sukuk.

Saudi investment bank NCB Capital has appointed Sarah Al-Suhaimi as CEO and member of the board subject to CMA approval. Tariq Linjawi, who had been acting CEO, is leaving the firm having successfully managed the organization through a transition period. Al-Suhaimi joins, following CMA approval, from Jadwa Investment where she was head of asset management and CIO, managing over SR17 billion of assets in public and private equity, real estate and fixed income. Sarah is the vice chairperson of the advisory committee to the CMA and is a graduate of King Saud University, with a Bachelor of Administrative Science degree in accounting.

Saudi Arabia's government plans to sell a 15 percent stake in National Commercial Bank (NCB) in an initial public offer. Finance Minister Ibrahim Alassaf said the IPO plan would be submitted to the market regulator in the third quarter of this year. Sovereign fund Public Investment Fund will be the seller. The fund, which currently owns most of NCB, will also sell an additional 10 percent stake to the government's Public Pension Agency. The pricing of the IPO was not discussed but it is likely to be one of Saudi Arabia's biggest. Until now, direct foreign investment is not allowed in Saudi's stock market. Authorities are preparing to open the market but it is not clear when this will happen.

The National Commercial Bank (NCB) has successfully placed its 5 billion Saudi riyal (Dh4.89 billion) 5-year subordinated Tier II capital sukuk offering. Great interest from the investor community generated a 2.1x oversubscribed orderbook exceeding the initial target issuance size of 4 billion riyals, allowing the transaction to be upsized to 5 billion riyals without impacting the final pricing of the sukuk. NCB’s issuance was priced at 6-month SIBOR+110bps. HSBC Saudi Arabia acted as a lead coordinator and GIB Capital, HSBC Saudi Arabia, JP Morgan Saudi Arabia and NCB Capital acted as joint lead managers and joint bookrunners. The issuance proceeds will be used to further support NCB’s growth plans across the various business segments of the bank.

JPMorgan Chase & Co. dropped Al- Rajhi Bank, the world’s largest Shariah-compliant lender, as a correspondent banking client amid a push to improve risk controls. The relationship with the bank ended Dec. 31 because JPMorgan couldn’t get enough information on where payments in dollar-clearing services for Al-Rajhi had originated. JPMorgan said it cut off the service to about 500 foreign lenders last year as regulators press the world’s biggest banks to verify that transactions are used for legitimate business. The crackdown seeks to halt funds tied to money laundering, terrorism and countries covered by economic sanctions. The two banks haven’t been cited by U.S. regulators for involvement in illegal money transfers.

The National Commercial Bank (NCB) has successfully placed its SR5 billion 10 non-call 5-year subordinated Tier II capital sukuk offering. The transaction represents NCB's debut of local riyal issuance and its inaugural Tier II capital offering. Interest from the investor community generated a 2.1x oversubscribed orderbook exceeding the initial target issuance size of SR4 billion, allowing the transaction to be upsized to SR5 billion without impacting the final pricing of the sukuk. NCB's issuance was priced at 6-month SIBOR+110bps. The issuance proceeds will be used to further support NCB's growth plans across the various business segments of the bank.

NCB Capital has joined hands with Jeddah-based SEDCO Development Company to launch the AlAhli SEDCO Residential Development Fund, a public close-end Shariah-compliant investment opportunity. The fund provides investors with capital growth by purchasing land plots in Jeddah for development, construction and sale of residential apartments targeting the middle income segment of the population. Minimum subscription is SR50,000 and the fund aims to have an internal rate of return of 10 percent per year. The new fund has been created to address the shortage of reasonably affordable residential accommodation for middle and upper income home buyers.

National Commercial Bank has mandated its own banking arm, NCB Capital, as well as that of Gulf International Bank and the Saudi Arabian units of HSBC and JP Morgan to arrange a local currency sukuk. The sukuk will enhance the bank's Tier 2 - or supplementary - capital and will have a ten-year lifespan with an option of the bank redeeming the instrument after five years. The size of the issue has yet to be determined. NCB's chairman was quoted in October as saying the bank was planning to issue a capital-boosting sukuk worth up to 4 billion riyals ($1.07 billion).