Sunday 25 October 2009

Investors in dark over exposure of Saudi banks to troubled firms

Saudi banks booked more provisions for bad loans during the third quarter but an opaque veil of secrecy over the level of their exposure to troubled private firms is keeping investors guessing over their adequacy.

Stock exchange data showed that five Saudi banks booked more provisions for loan losses in the quarter, raising by at least 183 per cent their total amount this year compared to the first nine months of 2008.

The provisions had been widely expected amid concerns over the solvency levels of heavily indebted Saudi conglomerates Saad Group and Ahmad Hamad Algosaibi and Brother (Ahab) which are at the centre of an estimated $22 billion (Dh80.7bn) debt implosion.

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