The entertainment sector relies on SMEs to support the ecosystem investment

Saudi Arabian Monetary Authority (SAMA) Deputy Governor H.E. Dr Fahad Alshathri told the audience on the second day of the Euromoney Conference that the Kingdom's economy has witnessed anoticeable improvement over the past two years.

The annual Euromoney Saudi Conference concluded on Thursday 19 September. More than 2000 delegates registered for the two day event which was organised in partnership with Saudi Arabia’s Ministry of Finance under the theme: Growing the New Financial Ecosystem. It included sessions with senior government ministers, CEOs and executives from international corporates and financial institutions.

Speaking with Victoria Behn, Director of Middle East and Africa, Euromoney Conferences, Dr Alshathri said: “The growth in the Saudi economy reflects positively in the private sector, according to the economic indicators. It shows a 5.9% increase in loans granted by SAMA to SMEs which exceeds the 2020 Financial Sector Program target of 5%. In addition, real estate loans grew by 11% in the first half of this year which was accompanied by a 9% growth in cement sales and 10% in steel sales”. 

Dr Alshathri added: “SAMA has a clear iinvestment policy of capital preservation, liquidity and risk-adjusted return, while investing SAMA's diversification asset reserve and maximising return on investment in the medium and long term. SAMA has contributed to enhancing the performance of the financial sector through its initiatives in the Financial Sector Development Program and opening the market to new players which is reflected in the issuance of two new banking licenses in addition to 21 licenses issued for financial technology companies.”

Dr Alshathri also addressed the issue of bank mergers: "Banking integration is based on two main considerations. The first focuses on market factors including cost reduction, increased market share and diversification of banking services. The second consideration is the role of supervision from central banks and the advantages of merging a strong bank with a weak one. The mergers that have already taken place in Saudi Arabia were based on these factors and overall economic benefit. As the Monetary Authority in Saudi Arabia, our role is to assess and ensure the regulations and legislation around mergers are followed. We are not opposed to future mergers but they will depend on whether they will bring added value and on the bank owners." 

Dr Alshathri also praised the progess in the insurance sector: “Insurance is an important pillar of the financial system and it is on right track. SAMA expects that increasing capital will enhance and empower the sector as well as improving the regulatory system. We expect that mergers between insurance companies will have positive repercussions.”

General Entertainment Authority Chief Executive Officer, Amr Banaja, also addressed the second day of the Euromoney Conference. He told the audience the GEA was founded three years ago and it began the process of building the sector from scratch: “The GEA seeks to strengthen its mechanisms and build an integrated sector through three axis; creating a legislative environment around quality, standards and inspections, strengthening funding, especially for the SMEs who play a pivotal role in the Saudi entertainment sector and building capacity and developing expertise.

“The GEA aims to create a well-regulated and thriving entertainment sector. Our goal is to improve the quality of citizens’ lives relating to Vision 2030 and we see SMEs as being a huge contributor to the sector. The GEA is already working with private sector partners to organize events across the Kingdom and attract tourists, this year over 5,000 events will take place across the Kingdom. We expect to see a huge increase in foreign tourists with the introduction of the new tourist visas. Last year we successfully trialed these visas during Formula E which was held in Diriyah. We expect the growing tourism industry both internal and from abroad to contribute to the creation of jobs and boost the overall economy.”

During the second day of the Euromoney Conference, the panel discussions focused on: Regulating Digital Transformation and Managing Risks, the Evolution of the Kingdom's Equity Capital Market and Real Estate in the Kingdom. Panel members included key financial, business and thought-leaders including the Chief of Markets at Tadawul, Mohammed Sulaiman Al Rumaih; the Information Security Department Manager at the Capital Market Authority, Sultan Altukhaim and many more international experts, CEOs and global investors.

Victoria Behn, Director of Middle East and Africa at Euromoney Conferences, said: “The Euromoney Saudi Arabia Conference has been a fascinating series of discussions, highlighting the remarkable changes taking place in the Kingdom. We’re very grateful to all our speakersfor their participation.”