LONDON: Barclays Plc is about to overhaul its back office operations under a restructuring to help it comply with new post-crisis rules forcing British banks to ring-fence their retail operations from their riskier business.
It has formed a new company that will operate as a standalone unit providing support services to both of its two main operations when they are formally separated — retail and investment banking, the bank said.
The ring-fencing rules seek to avoid a repeat of the 2008 crisis, when banks’ bad bets threatened depositors’ cash. While Barclays was not among those that needed a UK taxpayer-funded bailout, the new rules apply to all lenders in Britain that have retail and commercial or investment banking activities.
At Barclays, the aim is that critical support functions could continue to operate smoothly if either of its two main businesses were to run into trouble, while also keeping costs down by not having several separate back-office units, sources involved in the project said.
The overhaul — including the creation of the new company known internally as ServCo. — will affect most of the more than 10,000 people who work in Barclays back offices operations in 17 countries around the world.
It will group together the bank’s huge operations in India and South Africa that provide technology support and data management, along with functions such as compliance with regulatory requirements, corporate relations, legal affairs and human resources.
While for some staff this will simply involve a change in the name of the legal entity they work for, the sources said it was also likely to lead to some job losses.
Barclays declined to comment on the possible staff cuts or the cost of the restructuring.
However, sources with direct knowledge of the project said it would soak up much of the £1 billion ($1.25 billion) that Barclays has said it will cost to comply with the ring-fencing rules.
The structural change shows the upheaval that British banks face to meet the rules that come into force in 2019. Other British lenders are working on similar models. HSBC transferred 18,000 employees to a UK-based service company in 2015, according to a company filing, as part of a move to insulate its back-office functions to comply with the new regulations.
HSBC plans to base its ring-fenced British retail and commercial banking business in Birmingham, shifting about 1,000 staff to the central English city from London. Barclays, however, will keep both main operations headquartered at its building in the capital’s Canary Wharf district.
Paul Compton, Barclays’ chief operating officer, is overseeing the creation of the new company, which will formally be called Barclays Services Ltd.
“From the outset, we have been keen to use the incoming ring-fencing regulations to enhance the banking experience for our customers and clients, and the establishment of the service company is a great example of how we can put this into practice,” Compton told Reuters in an e-mail.
Barclays to overhaul back office operations
Barclays to overhaul back office operations
Saudi Arabia launches 10th round of Sah savings product with 4.83% return
JEDDAH: Saudi Arabia has launched the 10th round of its subscription-based savings product, Sah, for December, offering a competitive return of 4.83 percent.
The initiative, aimed at fostering financial stability and supporting economic growth, is Shariah-compliant and government-backed.
The sukuk opened for subscription on Dec. 1 and will remain available until Dec. 3. Allocations are scheduled for Dec. 10, with redemption from Dec. 15 to 18, and payment due on Dec. 22, according to the National Debt Management Center’s 2024 product issuance calendar.
Organized by the NDMC and issued by the Ministry of Finance, the fee-free savings product offers low-risk returns and is accessible through the digital platforms of approved financial institutions.
Sah is the first savings product in Saudi Arabia specifically designed for individuals, structured as bonds within the Kingdom’s local bonds program and denominated in Saudi riyals.
It aligns with the Financial Sector Development Program under Saudi Vision 2030, which aims to increase the savings rate among residents from 6 percent to the international benchmark of 10 percent by the end of the decade.
The minimum subscription amount is SR1,000 ($266), equivalent to one bond, while the maximum is capped at SR200,000 per user during the program period. The product is exclusive to Saudi nationals aged 18 and above, with returns provided monthly based on the issuance calendar.
The savings period spans one year, offering fixed returns, with accrued yields disbursed at the sukuk’s maturity. Returns for future issuances will be influenced by market conditions.
Eligible individuals must hold accounts with one of five financial institutions: SNB Capital, Aljazira Capital, Alinma Investment, SAB Invest, or Al Rajhi Bank.
The 9th round of Sah, launched on Nov. 3, offered a slightly higher return of 4.89 percent. That issuance closed with total allocations reaching SR3.415 billion ($990 million).
The sukuk issuance for the 9th round was divided into five tranches, each with different maturities. The first tranche, worth SR2.524 billion, will mature in 2029. The second, valued at SR434 million, will mature in 2031. The third tranche, amounting to SR137 million, will mature in 2034. The fourth, totaling SR10 million, will mature in 2036. The fifth tranche, sized at SR310 million, will mature in 2039.
The NDMC has emphasized that the Sah sukuk program is designed to strengthen collaboration with the private sector. Future initiatives will focus on developing customized savings products tailored to different individual categories in partnership with banks, fund managers, fintech companies, and other institutions.
The launch marks a significant step by the Saudi government to promote savings and enhance financial inclusion, ensuring citizens have access to products and services that meet their financial needs.
Saudi banks post 3.7% loan growth in Q3 amid rising credit demand: report
RIYADH: Saudi Arabia’s banking sector recorded a 3.7 percent sequential increase in loans and advances in the third quarter of 2024, driven by a 4.4 percent surge in corporate and wholesale banking, according to Alvarez & Marsal.
Deposit growth lagged behind, rising 1.4 percent during the same period, as credit demand continued to outpace deposit mobilization.
“The continued positive performance in the third quarter of 2024 reflects a balance of growth and improved cost efficiencies among Saudi banks. Profitability has increased primarily due to an increase in non-interest income amid a moderate rise in impairment charges,” Asad Ahmed, managing director of A&M Financial Services, said.
He added: “As the Saudi Central Bank maintains interest rates in line with the US Fed, potential further rate cuts in the coming quarters are likely to affect interest margins. Focus on non-interest income and improved cost efficiencies will remain central going forward.”
Time deposits grew by 4.2 percent, underscoring the high-interest rate environment. The loan-to-deposit ratio exceeded 100 percent, indicating that credit demand outpaced deposit mobilization.
Operating income increased by 6.0 percent during the quarter, driven by a 15.2 percent rise in non-interest revenue. This contributed to an overall improvement in the cost-to-income ratio, which fell by 31 basis points to 31.0 percent.
Net income rose by 5.3 percent, reaching SR20.5 billion, even as impairment charges surged by 30.4 percent.
The Saudi Central Bank reduced repo rates by 50 basis points in line with the US Federal Reserve’s actions. Despite this, net interest margins remained steady at 2.95 percent, supported by an 18-basis-point increase in the yield on credit to 8.6 percent and a slight rise in the cost of funds to 3.5 percent.
Saudi Arabia’s Vision 2030 continues to drive non-oil economic growth, spurring consumer spending, tourism, and construction activities.
Financial institutions are also prioritizing digital transformation. For example, Al Rajhi Bank’s acquisition of a controlling stake in “Drahim,” a management platform, highlights the growing integration of traditional banking and fintech.
According to the report, Saudi banks are well-positioned for sustainable growth as they focus on enhancing non-interest income and operational efficiency in a dynamic economic environment.
While geopolitical challenges and oil market fluctuations present risks, the Kingdom’s banking sector remains resilient, playing a key role in advancing the broader economic objectives outlined in Vision 2030.
Japan’s Saudi crude oil imports reach 41.8% of October total
TOKYO: Japan’s imports of Saudi oil in October 2024 amounted to 27.8 million barrels, a significant 41.8 percent of the total, according to the Japanese Ministry of Economy, Trade and Industry’s Agency of Natural Resources and Energy.
During October, Japan imported 66.53 million barrels, of which the Arab share was 97.8 percent or 65.06 million barrels.
The strategic importance of Arab countries in Japan’s energy security is highlighted by their significant contribution to Japan’s oil imports. The main contribution was from four Arab countries — the UAE, Saudi Arabia, Kuwait, and Qatar — as well as the neutral zone between Saudi Arabia and Kuwait.
The UAE emerged as the largest supplier, providing 31.8 million barrels, which accounted for 47.8 percent of the total imports. Qatar and Kuwait followed, contributing 2.7 million barrels (4.1 percent) and 2.04 million barrels (3.1 percent), respectively. The neutral zone, a smaller supplier, provided 1.1 percent of Japan’s total imports.
Japan’s geopolitical decisions continue to shape its oil imports. With a ban on oil imports from Iran and Russia, the rest of its oil imports in October were sourced from Central and South America (0.9 percent), Southeast Asia (0.8 percent), Oceania (0.3 percent), and the US (0.2 percent).
Startup Wrap – Early-stage funding continues to capture interest
CAIRO: Early-stage startups across the Middle East and North Africa region secure investments to drive innovation in sectors such as logistics, fintech, and climate tech.
Saudi-based Nama Ventures co-led Egypt’s Nowlun $1.7 million seed funding round along with venture capital firm A15.
The round also saw participation from Sanabil 500 Global and other angel investors.
Founded in 2021 by Moataz Khamis, Ahmed Emara, and Mahmoud Khaled, Nowlun’s platform provides businesses with access to real-time pricing across major shipping lines, enabling them to make faster and more informed decisions.
The company plans to utilize the raised capital for expansion and the development of its technology.
Mohammed Al-Zubi, founder of Nama Ventures, and Bassem Raafat, principal at A15, lauded the company’s mission and strategy.
Naif Al Rajhi acquires stake in Jordan’s Mawdoo3
Saudi investment firm Naif Al Rajhi Investment has acquired a strategic stake in Jordan-based artificial intelligence Arabic content platform Mawdoo3 for an undisclosed amount.
Founded in 2010 by Mohammad Jaber and Rami Al-Qawasmi, Mawdoo3 specializes in AI technologies and large language models tailored to the Arabic language.
The deal aligns with Naif Al Rajhi Investment’s focus on emerging sectors, while providing the Jordan-based firm with the resources to expand into the Saudi market.
Mawdoo3, which has raised $25 million over three funding rounds – including a $10 million series B in 2019 – is poised to strengthen its regional presence through this partnership.
Geidea expands SoftPos solution to Egypt after success in Saudi Arabia and UAE
Geidea, a prominent Saudi provider of digital payment solutions, is set to launch its SoftPos service in Egypt after successful rollouts in Saudi Arabia and the UAE.
The SoftPos technology enables merchants to accept secure contactless payments via smartphones, eliminating the need for traditional point-of-sale devices.
This expansion is part of Geidea’s strategy to drive digital transformation across the region by enhancing payment efficiency and accessibility for businesses of all sizes.
SoftPos allows merchants to process secure payments directly from smartphones, adhering to global data protection and transaction safety standards, the company explained.
Flat6Labs backs 10 Saudi startups in Riyadh Seed Program cycle
Flat6Labs, a seed and early-stage venture capital firm operating in the MENA region, has invested in 10 Saudi startups as part of its fourth Riyadh Seed Program cycle.
The startups span a variety of sectors, including e-commerce, logistics, Software-as-a-Service, and cybersecurity, and each received $133,000 in funding.
The initiative is supported by the Saudi Venture Capital Co., Jada Fund of Funds, and Riyadh Valley Company, with additional backing from the National Technology Development Program.
Since launching its Riyadh program in 2023, Flat6Labs has funded 41 startups, solidifying its role in fostering innovation in Saudi Arabia’s entrepreneurial ecosystem.
Sylndr secures $7.46m to boost Egypt’s used car marketplace
Egypt-based used car marketplace Sylndr has raised $7.46 million in a capital facility to support its operations and growth.
EFG Hermes acted as the sole financial advisor for the transaction, with financing provided by EFG Corp-Solutions, Bank NXT, and EG Bank, among others.
Founded in 2021 by Amr Mazen and Omar El-Defrawy, Sylndr enables users to buy and sell used cars while offering financing solutions.
The new capital will be used to enhance customer experience, diversify inventory, and expand financing options. This follows a $12.6 million pre-seed round in 2022, led by RAED Ventures and Algebra Ventures.
Morocco’s PTS raises $500k to scale fintech solutions
Premium Technology & Services, a Morocco-based fintech startup, has secured $500,000 from BMCE Capital Investments, the private equity arm of BMCE Capital Group.
The funding will be used to advance PTS’s solutions for digitizing traditional banking cards, which are tailored to meet the evolving needs of banks and businesses.
Founded in 2020 by Samir Younes and two others, PTS plans to leverage the investment to drive innovation and scale operations to meet increasing demand in the region.
Watercycle Technologies raises $5.6m to advance MENA expansion
UK-based climate tech company Watercycle Technologies has closed a $5.6 million series A investment round led by Par Equity, alongside participation from Aer Ventures, Greater Manchester Combined Authority, and the University of Manchester Innovation Factory.
Founded in 2020 by Ahmed Abdelkarim and Sebastian Leaper, Watercycle Technologies focuses on sustainable critical mineral recovery while producing clean, drinkable water.
This investment will help the company expand its operations, with plans to extend services into the MENA region to support global Net Zero initiatives.
Iraq-based edtech Eduba acquired by a regional telecom giant
Eduba, an Iraq-based education tech startup, has been acquired by an undisclosed telecommunications conglomerate in a seven-figure deal.
Founded in 2019 by Azad Hassan, Haider Shaaban, and Raed Kadhem, Eduba began as a school management app and gained traction among private schools, securing accreditation from Iraq’s Ministry of Education.
This acquisition highlights the growing value of edtech solutions in the region and positions Eduba for further expansion under its new ownership.
Japan’s AI startup Recursive Inc. inks MoU with Saudi Arabia’s KAIMRC
Japan-based AI startup Recursive Inc. has signed a memorandum of understanding with the King Abdullah International Medical Research Center in Saudi Arabia to jointly develop an advanced system for the early detection of tuberculosis.
The partnership, formalized during the Riyadh Global Medical Biotechnology Summit, aims to leverage Recursive’s AI expertise and KAIMRC’s medical research capabilities to improve TB screening accuracy and diagnosis speed in the Kingdom.
This collaboration, supported by the Ministry of National Guard-Health Affairs, aligns with Saudi Arabia’s Vision 2030 goals to transform its healthcare system and improve public health.
Using chest X-ray imaging data, the AI solution will enable timely TB diagnosis and treatment, reducing mortality and transmission risks.
“We are truly honored to partner with KAIMRC on this groundbreaking initiative,” said Tiago Ramalho, CEO of Recursive Inc.
“By combining KAIMRC’s pioneering medical research with our AI expertise, we are confident we can make a meaningful impact, not only in Saudi Arabia but also in regions worldwide that face the increasing challenge of TB and other infectious diseases,” he added.
The initiative also supports Saudi Arabia’s National Tuberculosis Program, which seeks to reduce TB mortality and incidence rates by 95 percent and 90 percent, respectively, by 2035 compared to 2015 levels.
Through this collaboration, Recursive and KAIMRC aim to create a scalable TB screening model for broader application in high-burden regions while exploring the use of AI to address other infectious diseases.
UAE and India emerge as top destinations for Saudi Arabia’s non-oil goods
RIYADH: Saudi Arabia’s Arab neighbor UAE was the favorite destination for the Kingdom’s non-oil goods in September, with exports to the Emirates amounting to SR6.54 billion ($1.74 billion), official data showed.
According to the General Authority for Statistics, Saudi Arabia exported mechanical and electrical equipment worth SR3.10 billion to the UAE in September, followed by transport parts and chemical products valued at SR1.64 billion and SR375.8 million, respectively.
Bolstering the exports of non-oil goods is a crucial goal outlined in Saudi Arabia’s Vision 2030 economic diversification agenda, with the Kingdom steadily reducing its decades-long dependence on crude revenues.
Earlier this month, speaking at the World Investment Conference, Saudi Arabia’s Minister of Economy and Planning Faisal Alibrahim said that non-oil activities now account for 52 percent of the Kingdom’s gross domestic product.
He also added that this sector of the economy has been growing at 20 percent since the launch of the Vision 2030.
In September, Saudi Arabia’s outbound shipments of plastic and rubber products to the UAE stood at SR345.9 million, followed by live animals and animal products at SR149.6 million.
India was another major destination for Saudi Arabia’s non-oil products over the period, with the Asian nation receiving inbound shipments worth SR2.35 billion from the Kingdom.
Chemical products and allied industries worth SR1.21 billion were imported from Saudi Arabia by India.
Other major non-oil exports to the country were plastic products and jewelry valued at SR438.4 million and SR345.5 million, respectively.
China held the third spot for Saudi Arabia’s non-oil exports, with the Asian giant receiving inbound shipments from the Kingdom valued at SR1.73 billion in September.
Other top destinations for Saudi Arabia’s non-energy products over the month were Singapore, which imported goods valued at SR1.39 billion, Turkiye at SR973.4 billion, and Belgium at SR964.7 billion.
Egypt imported non-oil goods worth SR862.8 billion from the Kingdom, followed by the US and Jordan at SR743.2 billion and SR733.1 billion, respectively.
Overall, Saudi Arabia’s non-oil exports increased by 22.8 percent year on year in September, reaching SR25.95 billion.
Affirming the progress of Saudi Arabia’s non-oil business activities, the Kingdom’s purchasing managers’ index rose to a six-month high of 56.9 in October, beating the September rating of 56.3 and the August level of 54.8.
According to the Riyad Bank Saudi Arabia PMI report, any readings above 50 indicate expansion of non-oil business activities, while levels below 50 signal contraction.
In October, a report released by Moody’s also projected that Saudi Arabia’s non-hydrocarbon real gross domestic product is set to grow between 5 percent and 5.5 percent from 2025 to 2027, driven by increased government spending.
GASTAT revealed that non-oil exports worth SR16.52 billion were sent to other countries through sea from Saudi Arabia, while outbound shipments via land and air totaled SR4.96 billion and SR4.46 billion, respectively.
King Fahad Industrial Sea Port in Jubail was the main exit point for Saudi Arabia’s non-energy exports with goods valued at SR3.54 billion.
Al Bat’ha Port handled non-oil outbound goods worth SR1.78 billion, while exports worth SR802.8 million passed through Al Hadithah Port.
Among airports, King Khalid International and King Abdulaziz International handled non-hydrocarbon export goods worth SR2.33 billion and SR1.89 billion, respectively.
Saudi Arabia’s overall merchandise exports
GASTAT, in its report, revealed that Saudi Arabia’s overall merchandise exports in September stood at SR88.56 billion, representing a decline of 14.9 percent compared to the same period of the previous year.
According to the authority, oil exports witnessed a fall of 24.5 percent year on year in September.
“Consequently, the percentage of oil exports out of total exports decreased from 79.7 percent in September 2023 to 70.7 percent in September 2024,” said GASTAT.
To stabilize the market, Saudi Arabia cut its oil production by 500,000 barrels per day in April 2023, a reduction now extended until December 2024.
China was the Kingdom’s most important trading partner in September, with exports to the Asian nation amounting to 13.91 billion, followed by Japan and the UAE at SR7.98 billion and SR7.49 billion, respectively.
The strong flow of Saudi exports to China signifies strong bilateral relations between both nations, with the Kingdom being the largest trading partner of China in the Middle East since 2001, and bilateral trade between the nations reaching $107.23 billion in 2023.
China and Saudi Arabia are strategic partners in various other sectors like energy and finance, as well as the Belt and Road Initiative.
In September, Saudi Arabia’s exports to South Korea amounted to SR6.87 billion, followed by the US at SR3.27 billion, Egypt at SR2.89 billion and Singapore at SR2.70 billion.
Imports in September
GASTAT revealed that Saudi Arabia’s overall imports in September reached SR69.8 billion, representing an increase of 15 percent compared to the same month of the previous year, while the surplus of the merchandise trade balance decreased by 56.9 percent during the same period.
In September, Saudi Arabia imported goods worth SR17.99 billion from China, led by mechanical appliances and electrical equipment valued at SR8.29 billion.
The authority added that Chinese imports of transport equipment and base metal products amounted to SR2.37 billion and SR1.66 billion, respectively.
Saudi Arabia also imported plastic and rubber products from China valued at SR976.6 million, followed by textiles at SR955.6 million.
China was closely followed by the US and Germany with imports from these nations to the Kingdom in September stood at SR5.39 billion and SR3.45 billion, respectively.
In September, Saudi Arabia imported goods worth SR3.42 billion from the UAE, and SR3.21 billion from India.
Italian imports to the Kingdom amounted to SR2.50 billion, while inbound shipments from Japan and Indonesia stood at SR2.34 billion and SR2.08 billion, respectively.
GASTAT said that inbound shipments worth SR43.07 billion reached the Kingdom via sea, while imports valued at SR18.07 billion and SR8.73 billion came via air and land, respectively.
King Abdulaziz Sea Port in Dammam was the primary entry point for goods in September through sea, with imports valued at SR19.65 billion, representing 28.1 percent of the total inbound shipments.
The report revealed that Jeddah Islamic Sea Port handled incoming shipments valued at SR12.54 billion, followed by Ras Tanura Sea Port at SR4.78 billion.
King Khalid International Airport in Riyadh welcomed inbound shipments worth SR8.57 billion.
Through land, Al Bat’ha Port and Riyadh Dry Port handled imports valued at SR3.51 billion and SR3.09 billion, respectively.
