LONDON: The Bank of England will allow European banks to continue operating without creating expensive subsidiaries after Brexit, the BBC reported, the opening gambit in a tussle with the EU over London’s position as a top global financial hub.
The BoE’s decision, if confirmed, would mean European banks offering wholesale services would not face new hurdles to operating in London after Britain leaves the European Union in March 2019.
A BoE spokesman declined to comment on the report ahead of the publication at 1300 GMT of the central bank’s approach to future supervision of foreign banks, insurers and clearing houses.
By allowing EU banks to function as normal, the BoE’s announcement represents the first salvo in an expected struggle with the EU over banking rules that will decide the fate of London’s lucrative financial center for decades to come.
The central bank’s proposal indicates a much softer British position than that of the EU, which insists London-based banks will lose access to EU banking markets after Brexit and wants to pull some key banking business back.
London vies with New York for the title of the world’s financial capital, dominates the $5.1-trillion-a-day global foreign exchange market and is home to more banks than any other center.
But many other EU capitals see London’s Brexit tumult as an opportunity to grab new business.
Countries such as France, Germany and Ireland are wooing banks based in London to move operations to them after Brexit.
Earlier this year, BoE Governor Mark Carney called for Britain and the EU to recognize each others’ bank rules after Brexit, or risk a potentially damaging hit to financial services across Europe where many companies depend on London for funding.
The EU’s top Brexit negotiator Michel Barnier this week reiterated his stance that London stands to lose access to the EU banking market if it sticks to its plan to impose new controls on migration, one of the conditions for membership of the single market.
The EU has already proposed that clearing of euro-denominated derivatives, which are done mainly in London, could move to the euro zone after Brexit, if there is no comprehensive Brexit deal between EU and UK regulators.
The tough EU line on banking is extremely sensitive for the United Kingdom which collects over £70 billion (SR351.07 billion) a year in tax from the financial services sector.
So far, British Prime Minister Theresa May has largely conceded to the EU on the structure, timetable and substance of the negotiations.
A later version of the BBC story removed a reference to the BoE proposing that EU banks would be allowed to operate as usual even if no divorce deal was struck between London and Brussels.
The BoE’s proposal indicates both Britain’s concern to preserve London as by far the biggest global banking center in its time zone but also worry about the potential regulation that the EU could impose on banks after Brexit.
May has said Britain will leave the EU’s single market, raising questions about how companies in Britain will do business in the bloc after Brexit, and how European companies can operate in Britain.
The City of London welcomed the BoE’s move.
“Allowing European wholesale banks to operate as normal in the UK after March 2019 is a welcome bit of news to end the year for the City,” said Catherine McGuinness, the head of the City of London Corporation.
The BoE move could also be a gesture of goodwill aimed at softening European Commission plans, due to be published on Wednesday, to stiffen the rules for non-EU investment banks which operate inside the bloc.
Many of those banks, like Goldman Sachs and Morgan Stanley have their main European operations in London at present, though they are making plans to move some operations to EU centers.
The BoE has said around 10,000 financial services jobs are likely to move out of the UK immediately after Brexit in March 2019. Bankers say more may follow in the years ahead.
More than 100 banks operating in London are branches of lenders headquartered elsewhere in the EU. Currently, they operate in Britain under EU “passporting” rules which are due to expire when Britain leaves the bloc in March 2019.
The BoE had previously said it would let banks know before the end of the year whether these branches must reapply for branch licenses to operate after Brexit, or would need to be turned into subsidiaries, an option Boston Consulting Group has said could cost banks up to €40 billion.
Switching from being a branch to a subsidiary means having to build up buffers of capital and cash locally, and come under the direct supervision of the Bank of England.
EU retail banks that hold UK customer deposits above a certain threshold would have to become subsidiaries, the BoE has already said.
BoE to allow EU banks to operate in UK as normal after Brexit, BBC reports
BoE to allow EU banks to operate in UK as normal after Brexit, BBC reports
Saudi Aramco secures $9bn in deals on first day of iktva forum
- 145 agreements signed in one day mark a leap toward strengthening local industries
RIYADH: Saudi Aramco has secured 145 agreements and memorandums of understanding worth an estimated $9 billion on the opening day of the In-Kingdom Total Value Add Forum and Exhibition 2025.
These deals are expected to drive the localization of products and services in Saudi Arabia, enhancing local content in the supply chain and fostering collaboration.
The agreements align with the core objectives of iktva, which aim to enhance supply chain efficiency and add value across Saudi Aramco’s operations.
By increasing local content, the program helps develop a more diverse and competitive energy industry in the Kingdom. It also supports the strategic goal of retaining 70 percent of procurement spending within Saudi Arabia, directly benefiting local businesses.
On its first day, the event highlighted 210 localization opportunities across 12 sectors, with a combined annual market value of $28 billion. These opportunities are seen as key to driving long-term industrial growth and reducing reliance on imports.
During the event, Saudi Aramco President and CEO Amin Nasser reflected on the company’s progress, noting that Aramco achieved a 67 percent local content score for its procurement of goods and services in 2024, up from just 35 percent in 2015.
“Since launching iktva in 2015, we’ve made significant strides. Back then, most of our materials and services were sourced from outside Saudi Arabia,” Nasser said.
Nasser emphasized that the success of iktva depends on its ability to create value for all stakeholders.
“For Aramco, a largely localized supply chain ensures continuity and helps us navigate operational challenges more effectively,” he said. “Since 2015, iktva has contributed over $240 billion to Saudi Arabia’s GDP and led to the creation of 350 local manufacturing facilities with investments totaling more than $9 billion.”
These new facilities cover a range of sectors, including chemicals, non-metallics, information technology, electrical and instrumentation, and drilling. As a result, 47 products are now being manufactured for the first time in Saudi Arabia.
Saudi Energy Minister Prince Abdulaziz bin Salman also addressed the gathering, announcing the Kingdom’s plans to enrich and sell uranium. “We’re committed to monetizing all our mineral resources, including uranium,” the minister said. “By enriching and selling uranium, along with producing yellowcake, we will secure essential raw materials for energy security.”
Prince Abdulaziz discussed the future of the petrochemical sector, emphasizing the importance of producing more advanced chemicals. “The future of petrochemicals is not just about plastics or polymers. We’re aiming for better, more sophisticated chemical products,” he noted.
Looking ahead, the energy minister spoke about potential collaborations with Egypt, indicating that a roadmap for joint ventures would be outlined in February. “We have much to look forward to with Egypt,” he said.
In a separate panel, Prince Abdulaziz highlighted the role of integrated collaboration between sectors in achieving the Kingdom’s Vision 2030.
He explained that major energy expansion projects are key to supporting industrial development by providing diverse energy sources and offering competitive prices for gas feedstock.
This, he added, would help stimulate the growth of manufacturing and facilitate the transition to cleaner energy.
Saudi Investment Minister Khalid Al-Falih also spoke during the ministerial dialogue session, stressing that standardized incentives for the industrial sector are critical to achieving Vision 2030.
These incentives, he said, will help accelerate the creation of new industrial facilities and strengthen local supply chains at all stages of the value chain, making Saudi industries more competitive.
The first day of the forum also saw the launch of ASMO, a joint venture between Saudi Aramco Development Co. and DHL. The new venture aims to transform the procurement and supply chain landscape across the Middle East and North Africa region.
Additionally, the opening ceremonies for the Novel Non-Metallic Solutions facility at King Salman Energy Park and the NMDC Offshore Fabrication Yard at Ras Al-Khair were held.
Novel, a partnership between Aramco and Baker Hughes, is focused on introducing a range of composite products to the market, while the NMDC fabrication yard will provide maritime engineering services and fabricate equipment and materials.
Running from Jan.13-16 in Dammam, the iktva Forum continues to spotlight critical infrastructure projects and collaborative opportunities aimed at advancing the local supply chain ecosystem and supporting the Kingdom’s long-term industrial goals.
Saudi entertainment authority unveils 29 investment opportunities
RIYADH: Saudi Arabia’s General Entertainment Authority has unveiled 29 investment opportunities targeting six key sectors of the industry.
The initiative, in collaboration with the Ministry of Investment, aims to expand the Kingdom’s entertainment landscape while fostering private sector participation and aligning with Vision 2030 objectives.
The targeted sectors include facilities, destinations, water parks, adventure parks, virtual reality parks, and e-gaming centers.
These opportunities are designed to enhance growth in the entertainment sector, drive economic diversification, and promote sustainable development.
According to the GEA, the initiative also seeks to empower the private sector within Saudi Arabia and internationally, while improving the quality of life for citizens and residents.
By focusing on infrastructure development across these entertainment segments, the initiative reflects Saudi Arabia’s strategic commitment to becoming a global entertainment hub. This effort also supports the Quality of Life Program, which is a core pillar of Vision 2030.
These investment initiatives are set to play a significant role in boosting the sector as projections indicate that the sector will generate 450,000 jobs and contribute 4.2 percent to the country’s gross domestic product by 2030.
Vision 2030 aims to transform Saudi Arabia’s entertainment sector by increasing household spending on recreation from 2.9 percent to 6 percent by 2030.
It seeks to generate over SR120 billion ($31.9 billion) in investments, create 100,000 direct and indirect jobs, and enhance the sector’s contribution to the economy.
Saudi Arabia, Oman to strengthen financial ties with new agreement
- Saudi Minister of Finance Mohammed Al-Jadaan and his Omani counterpart, Sultan Al-Habsi, signed deal to enhance cooperation in financial affairs
- Areement underscores commitment of Riyadh and Muscat to collaborate on advancing shared financial sector goals
JEDDAH: Saudi Arabia and Oman are set to strengthen financial ties with a new agreement aimed at enhancing cooperation and facilitating the exchange of information and expertise.
The deal, signed during the board of governors’ retreat of the Islamic Development Bank Group in the city of Madinah, aims to improve financial policies, governance in the public sector, and joint coordination on regional and international issues.
Saudi Minister of Finance Mohammed Al-Jadaan and his Omani counterpart, Sultan Al-Habsi, signed a memorandum of understanding to enhance cooperation in financial affairs between the two countries, according to a statement from the Saudi Finance Ministry.
This comes as Oman’s non-oil exports to Saudi Arabia have more than doubled since 2020, surpassing 1 billion Omani rials ($2.6 billion) by the end of 2023, according to Oman’s National Center for Statistics and Information. Non-oil imports from Saudi Arabia also grew, reaching 1.84 billion rials in the same period.
Al-Jadaan said “this MoU represents a significant step in the ongoing efforts to deepen financial collaboration between the two brotherly nations,”
He added: “it will pave the way for the exchange of financial expertise, the promotion of knowledge-sharing, and the fostering of closer economic ties.”
Al-Habsi underscored the importance of the MoU as “a cornerstone for enhancing bilateral relations.”
He said that “it will facilitate the exchange of financial information and expertise while strengthening coordination between Saudi Arabia and Oman on regional and international financial issues of mutual interest.”
The agreement underscores the commitment of Riyadh and Muscat to collaborate on advancing shared financial sector goals, further strengthening the ties between the two nations, the release added.
In October 2024, the two countries signed a deal to enhance economic and planning cooperation, focusing on medium and long-term strategies, monetary policies, and economic studies.
The five-year agreement was finalized by Saudi Minister of Economy and Planning Faisal Al-Ibrahim and Omani Minister of Economy Said bin Mohammed Al-Saqri.
Earlier in April 2024, another MoU was signed during a meeting between Al-Habsi and Sultan bin Abdulrahman Al-Marshad, the CEO of the Saudi Fund for Development.
The agreement centered on joint development projects, including initiatives in infrastructure, higher education, vocational training, and key industries, including mining, transportation, communications, and energy.
Closing Bell: Saudi main index sheds points to settle at 12,109.94
RIYADH: Saudi Arabia’s Tadawul All Share Index lost on Monday, dropping 17.03 points, or 0.14 percent, to close at 12,109.94.
The total trading turnover of the benchmark index was SR5.77 billion ($1.53 billion), as 114 of the listed stocks advanced, while 119 retreated.
The MSCI Tadawul Index also dropped by 2.34 points, or 0.15 percent, to close at 1,509.67.
The Kingdom’s parallel market Nomu increased, gaining 194.91 points, or 0.63 percent, to close at 31,234.44. This comes as 43 of the listed stocks advanced while 46 retreated.
Buruj Cooperative Insurance Co. was the best-performing stock of the day, with its share price surging by 9.95 percent to SR22.54.
Other top performers included United International Holding Co., which saw its share price rise by 7.97 percent to SR187, and Gulf General Cooperative Insurance Co., which saw a 4.38 percent increase to SR11.44.
Saudi Cable Co. and Saudi Industrial Investment Group also saw a positive change, with their share prices surging by 4.06 percent and 4 percent to SR107.60 and SR17.68, respectively.
Fawaz Abdulaziz Alhokair Co. saw the steepest decline of the day, with its share price easing 5.56 percent to close at SR14.60.
Jamjoom Pharmaceuticals Factory Co. and Middle East Specialized Cables Co. recorded declines, with their shares slipping 4.05 percent and 3.50 percent to SR156.20 and SR42.70, respectively.
National Medical Care Co. also faced a loss in today’s session, with its share price dipping 2.93 percent to SR159.20.
On Nomu, Multi Business Group Co. was the best performer, with its share price rising by 13.64 percent to reach SR18.50.
Alqemam for Computer Systems Co. also delivered a strong performance, with its share price rising by 9.28 percent, to reach SR93, while First Avenue for Real Estate Development Co. saw a 7.27 percent increase to end the session at SR9.44.
Albattal Factory for Chemical Industries Co. also fared well, with a 7.07 percent rise to SR62.10, and Alfakhera for Mens Tailoring Co. increased by 6.62 percent to SR6.60.
Al-Razi Medical Co. shed the most on Nomu, with its share price dropping by 10.58 percent to reach SR60.
Quara Finance Co. experienced a 6.30 percent decline in share prices, closing at SR18.74, while Advance International Co. for Communication and Information Technology dropped 4.98 percent to settle at SR4.20.
Meyar Co. and Intelligent Oud Co. for Trading were also among the top decliners, with Meyar Co. falling 4.70 percent to settle at SR70.9 and Intelligent Oud Co. for Trading declining 4.13 percent to SR51.10.
On the announcement front, Nofoth Food Products Co. has received board approval to transition from the Nomu-parallel market to the main market, according to a bourse filing.
The company noted that the move remains subject to Tadawul’s approval, as well as compliance with all listing rules and requirements.
Estidamah Capital has been appointed as the financial adviser for the proposed transition. Nofoth Food Products stated that any material developments regarding the process will be disclosed in accordance with regulatory requirements.
Nofoth Food Products Co. saw a 0.68 percent drop in its share price on Monday to settle at SR20.46.
Saudi Arabia unveils 15 new incentives to boost exports, logistics
RIYADH: Saudi Arabia has rolled out 15 new incentives under the Authorized Economic Operator program, to boost export competitiveness, enhance supply chain security, and advance the Kingdom’s ambitions as a global logistics hub.
The Ministry of Industry and Mineral Resources announced the incentives, which include key administrative benefits such as assigning liaison officers and account managers to streamline processes for investors and address challenges more efficiently.
As part of the program, companies will also gain access to industrial land, with long-term leases of up to 30 years, and eligibility for the “Custom Factory on Demand” service. These measures are designed to support industrial expansion and strengthen the Kingdom's position in global trade.
This announcement follows the ministry’s earlier declaration of an allocation of SR10 billion ($2.66 billion) to activate the Standard Incentives Program for the industrial sector. This funding, approved by the Saudi Cabinet in December last year, is intended to foster industrial investment, stimulate growth, and contribute to the sustainable development of Saudi industry.
The new incentives will also streamline procedures for investors, including expedited processing and priority access to pre-developed industrial lands and factories. Additionally, companies will be given preferential eligibility for incentives provided by the Saudi Export Development Authority.
Further financial support is available through the Saudi Industrial Development Fund, which can cover up to 75 percent of project costs. SIDF offers extended financing with repayment terms of up to 20 years and grace periods of up to 36 months. Eligible companies can also access advisory services and training programs from SIDF’s industrial academy.
The AEO program is a cornerstone of Saudi Arabia’s broader strategy to enhance customs and logistics services, simplify trade processes, and improve the efficiency of supply chains.
The initiative not only aims to bolster the position of Saudi companies as global leaders but also seeks to attract both local and foreign investments, especially benefiting small and medium-sized enterprises.
Launched by the Zakat, Tax, and Customs Authority, the Saudi AEO program aligns with global trade frameworks used by over 80 countries. It offers businesses that adhere to secure trade standards smoother operations in the international customs environment.
On Jan. 11, ZATCA expanded the program into a national initiative, integrating 15 government entities into the effort.
