hamad al - sayari : a brief overview of the saudi arabian banking sector speech by his excellency hamad al - sayari, governor of the saudi arabian monetary agency, at the opening of a branch of the national bank of kuwait, jeddah, 6 may 2006. * * * dear audience, it gives me great pleasure to be here tonight to inaugurate the branch of the national bank of kuwait ( nbk ) in jeddah, a city which has long been known for embracing the business sector due to its closeness to the sacred places and its unique location on the red sea. the commencement of nbk of its banking operations in the kingdom of saudi arabia marks further consolidation of cordial relations between the two brotherly countries ( saudi arabia and kuwait ). this is one of the fruits of mutual gulf work which the leaderships of the two countries are keen to enhance. dear brothers, the inauguration of nbk branch comes at a time when the kingdom is witnessing robust economic performance. in 2005, the saudi economy grew in real terms by 6. 5 percent ; the private sector registered a real growth of 6. 6 percent. what is reassuring is that the private sector has become the main impetus of the saudi economy. its average growth rate for the past years stood at 5. 3 percent. this is an incarnation of the wise measures adopted by the government under the leadership of the custodian of the two holy mosques to carry out more structural reforms ( institutional and regulatory ) which we have begun to feel their positive effects in all aspects of economy. it will be appropriate here to say a few words about the dynamic and crucial role played by the banking sector in the kingdom, which is manifested in the substantial increase in the credit extended to the private sector which grew by 29 percent annually during 2003 – 2005 ; and it amounted to rls 436 billion at the end of 2005. as a result of the expansion in banking business, the assets of the banking sector increased by 14. 4 percent annually during the past three years ( 2003 – 2005 ). at the end of the first quarter of 2006, they stood at rls 797. 4 billion, constituting about 70 percent of the kingdom ’ s economy. deposits with the banking sector rose by 13. 7 percent annually during the past three years, and they amounted to rls 521. 5 billion at the end of the first quarter of 2006. the positive indicators of the banking sector which rest on the

hamad al - sayari : challenges posed to investment in saudi banks speech by his excellency hamad al - sayari, governor of the saudi arabian monetary agency, to the symposium on challenges posed to investment and saudi banks, riyadh, 2 december 2006. * * * dear audience, at the beginning, i would like to welcome all honorable attendance. it gives me a great pleasure today to address you at the outset of the deliberations of this symposium on " challenges posed to investment and saudi banks in an environment of global economic openness " which is convened at a time the kingdom is witnessing a period of economic growth accompanied with and enhanced by steps of economic reforms in the fields of streamlining of regulations, restructuring of the national economy, and approval of a number of mega development projects as well as the accession to the world trade organization which is an important step towards enhancing integration into the world economy, coping with economic developments, and attraction of foreign investments apart from accession to global markets which will be reflected on the competitive capacity of the national economy. dear audience, the current symposium is being held in a promising economic environment in this country. the kingdom has recorded outstanding economic results. the real gross domestic product rose by 6. 5 percent in 2005. this growth rate was reflected on almost all sectors of the economy which is characterized by strong investment. international rating agencies recorded their appreciation and certified the efficiency and strength of the national economy. eventually, they raised the credit rating of the kingdom to advanced grades. this environment promoted the interest of foreign investors to participate in and benefit from the various investment opportunities available in the saudi economy. the saudi banking system has played a vital role in the enhancement of the national economy. thanks to its use of the latest technologies and various banking products, the banking system has witnessed good development under a supervisory system which is very keen to meet domestic requirements and legislation and to comply with international standards, including basel capital adequacy standard. the banks operating in the kingdom are very serious in the application of this standard. as a result, the kingdom's banking system has become one of the advanced systems, not only at the regional level but also at the international one. dear audience, basel ii standards are the most important supervisory initiatives of this decade, and they will have a considerable impact on changing the conduct of risk management at all banks regardless of their size and location. the standards aim at achieving a number of objectives, including ensuring the capital adequacy of