8686
First Online-Only Retail Bank Launched
World Economy

First Online-Only Retail Bank Launched

Gulf International Bank (GIB) has launched the Middle East’s first online-only consumer banking business, seeking to diversify after almost collapsing during the global financial crisis and to tap into a young, tech-savvy population.
Until now, GIB has been solely a wholesale bank – which provides services to big companies and financial institutions. It needed a bailout from the Saudi government after suffering $757 million of losses in 2007 from investing in complex debt instruments linked to the US subprime housing crisis, Reuters reported.
Its ability to fund itself from wholesale money markets was also compromised as banks stopped lending to each other, meaning it had to scale back its operations. Its assets roughly halved between 2007 and 2010, and remained nearly a third below 2007 levels at the end of 2013, according to financial statements.
Called “Meem” - the letter M in Arabic - the new retail banking platform will offer personal finance products and credit cards in Saudi Arabia, the region’s largest economy.
  New Business
Around two-thirds of the population are under 30, and the kingdom is the biggest user of YouTube per capita in the world and among the top 10 nations for Twitter use.
The new business will give Bahrain-based GIB – 97 percent-owned by the Saudi government – a more stable funding base, GIB Chief Executive Yahya Alyahya said at a launch event.
“It will be a challenge for the bank against any potential financial crisis in the future so we will not face the problems that we faced in 2008, which took us to the point where the bank could have defaulted,” he told reporters.
“Dealing with retail is also profitable in itself, so that is going to enhance our profitability.”
GIB aims to have around a 3 percent share of the Saudi consumer banking market by 2020. “Our strategy is to be a pan- Persian Gulf universal bank, so after Saudi and when the proposition proves successful, we will move it to other countries,” Alyahya said, adding it could launch into another unspecified Persian Gulf country by next year.

 

Short URL : http://goo.gl/F5eBXT

You can also read ...

 Final Nail in Abraaj Coffin
The Abraaj Group has been put through the ringer in past...
Saudi Arabia Bleeds as Capital Flight Continues
As Saudi Arabia raises the stakes in its dispute with Canada...
Experts Say China Economy Manageable
Recent external pressures, a general global trade malaise...
Qatar Pledges $15b Investment :      Turkish Lira Weakens 6% on Threat of More US Sanctions
Turkey’s battered lira weakened more than 6% against the...
Europe Should Resist Illegal US Penalties
European countries should take effective steps to counter US...
Indonesia Sets Moderate Growth Goals
Amid rising external pressures, Indonesia’s economy is...
 Crypto Scams on the Rise in UK
Crypto currency scams are using images of celebrities and...
Australia Drought Could Cost $12 Billion
The Reserve Bank of Australia and a new report have warned of...

Trending

Googleplus