SAMBA denies deposits down by 'anti-US protests'

Saudi American Bank, was in the spotlight early this week, amid reports in the Financial Times and the Saudi Arab News that deposits declined US $600 million in the first quarter of 2002

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By  Massoud Derhally Published  May 28, 2002

Saudi American Bank, the second largest bank in the Kingdom by assets size, was in the spotlight early this week, amid reports in the Financial Times and the Saudi daily Arab News that deposits declined US $600 million (SR2.2 billion), as a result of an anti-US sentiment in the first quarter of 2002.

Some reports speculated that the decline in deposits at SAMBA, which is part, owned by Citibank (22.83%) and Saudi investors (73.6%), was a result of a deteriorating Israeli-Palestinian political situation and financial scrutiny of clients post the September 11 attacks.

In an interview with the Arab News, SAMBA’s managing director, Mike de Graffenried denied that the drop in bank deposits was a result of ‘Saudi defiance of the US.”

Commenting on news reports, de Graffenried attributed the drop to the closure of SAMBA’s Geneva subsidiary and thus a change in the way the bank dealt with fiduciary deposits. He told the Arab News, “customer business continues to grow robustly, with non-interest bearing deposits having increased from both December 2001 and March 31, 2002. Its loan business grew significantly during the first quarter of 2002.”

Commenting on the 3.5% decline in deposits, de Graffenried told the Saudi daily, “These deposits are now placed with international banks. Previously, these deposits had appeared on SAMBA’s own books,’ the managing director was quoted as saying by Saudi’s Arab News.

When asked to explain the decline by ITP.net, Mike de Graffenried said, “I will stand by the article in the Arab News (28 May) and will not comment further.”

Samba's customer deposits were at a record high of SR 59.67 billion ($15.9 billion) at the end of 2001.

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