NCB move toward Islamic banking ‘is market driven’

The National Commercial Bank’s (NCB) SR22.5 billion share sale is coming at an opportune time as the Saudi stock market seems to be on a rebound, says a leading investment analyst.
Saudi Arabia's bourse continued its upward trend on Monday after a string of strong quarterly earnings.
“We had some good results from corporates and the market is reflecting it already,” John Sfakianakis of Ashmore Group told Arab News.
His remarks came as the NCB announced plans to convert itself into a full-fledged Islamic bank within about five years.
“The decision to convert the NCB to a full-fledged Islamic bank is market driven and positive but there is plenty of appetite for it to be subscribed as is,” said Sfakianakis.
Subscriptions for NCB's initial public offering (IPO), the first by a bank in the Kingdom since 2008, opened on Sunday and will run until Nov. 2.
Basil Al-Ghalayini, CEO of BMG Financial Group, commented: “The declaration of the bank's management on its future readiness within 5 years is credible and should be taken seriously. It is unknown, as of yet, how this declaration may impact the marketability of its IPO.”
According to reports, the IPO would be worth SR22.5 billion ($6 billion) if all 500 million shares are purchased at the offered price of SR45 each.
According to the bank, its Shariah board reviewed a plan by NCB to convert itself into a full-fledged Islamic bank within a period “that is expected not to exceed five years”.
It determined that the bank had a “sincere will” to become fully Islamic, adding that some fatwas or religious rulings in the past had found it permissible to buy shares in a conventional bank that would become Islamic, the board added in its statement.