Fatwa No Barrier to Saudi Arabia’s $6 Billion Bank IPO

Not even a fatwa against National Commercial Bank’s initial public offering could derail the biggest-ever share sale in the Middle East. Saudi Arabia’s largest bank said in a statement today it attracted 311 billion riyals ($83 billion) of bids from about 1.26 million investors. While that pales by comparison with the almost 9 million who subscribed for Alinma Bank’s IPO in 2008, NCB’s offering to sell 300 million shares was 23-times oversubscribed, signaling investors pitched for larger blocs of shares. The IPO is considered un-Islamic, as criticism deepened over the bank’s non Shariah-compliant assets. To mitigate the controversy, NCB pledged to divest about $38 billion of assets to become fully Shariah-compliant in five years.