SAIB maintains strong relationships with its business partners, ensuring that its operations continue without interruption.
The long-term relationships the Bank has established with its vendors and service providers are based on mutual trust and confidence, and it conducts itself in an ethical and transparent manner with them.
Suppliers
The Bank’s procurement costs are primarily centred around stationery, equipment, and software. SAIB remains conscious of its impact on the local economy and local communities and strives to source from Saudi suppliers whenever possible. Suppliers are regularly evaluated for their performance to ensure the timely procurement and quality of supplies and to maintain good relations. The Bank does its part to ensure that it meets its payment obligations in a timely manner.
2020
2019
2018
2017
2016
Had business with
New vendor created
International suppliers
97
22
137
39
79
24
Local suppliers
262
77
305
148
154
80
Spending (international procurement) –
SAR
82,270,891*
68,244,427
60,777,564
36,644,044
25,000,000
Spending (local procurement) – SAR
359,999,608*
399,433,627
389,513,667
259,314,171
130,000,000
*Items such as Rent, Petty cash, and Utilities have been excluded
Correspondent banks
SAIB’s network of correspondent banks serves the MENA, European, African, and North American regions and is crucial in supporting the Bank’s overseas transactions.
Strategic partnerships
Wholly owned subsidiaries
Alistithmar for Financial Securities and Brokerage Company
Alistithmar for Financial Securities and Brokerage Company, which offers brokerage, asset management, investment banking and other services in the Kingdom of Saudi Arabia. The total capital of the Company is SAR 250 million.
with 25 million. shares outstanding. The Company does not have any debt instruments issued. The Company was established in July 2007 as a limited liability company, and in 2015 the Company was converted into a closed joint stock company. The Company provides brokerage services, investment management services in the form of mutual funds and portfolios, custody services and investment banking advisory services. Assets under management totalled SAR 20,800 million. as of December 31, 2020, of which SAR 5,766 million. is considered Shariah approved.
The Saudi Investment Real Estate Company
The Saudi Investment Real Estate Company holds title deeds as collateral on behalf of the Bank for real estate-related lending transactions. The Company has a total capital of SAR 500,000 and does not have any debt instruments issued.
SAIB Markets Limited Company
SAIB Markets Limited Company, was registered as a limited liability company in the Cayman Islands in July 2017. The total capital of the Company is SAR 187.5 thousand, and this Cayman Islands limited liability company does not have any debt instruments issued. The objective of this company is trading in derivatives and Repo activities on behalf of the Bank.
Saudi Investment First Company Ltd., completed the formalities for deregistration with regulatory authorities and was liquidated during 2020.
Associate companies
American Express (Saudi Arabia)
American Express (Saudi Arabia) (AMEX) is a Saudi closed joint stock company whose principal activities are to issue credit cards and offer other American Express products and services in Saudi Arabia. The company has a total capital of SAR 100 million. with 10 million shares outstanding, with the Bank holding a 50% interest or 5 million shares.
Saudi Orix Leasing Company
Saudi Orix Leasing Company (Orix) is a Saudi closed joint stock company in Saudi Arabia whose primary activities include lease financing services. Orix has 55 million outstanding shares of which the Bank holds 20.9 million shares or 38% of the outstanding shares. Subsequent to December 31, 2020, the company was renamed to YANAL Finance.
Amlak International for Finance and Real Estate Development Co.
Amlak International for Finance and Real Estate Development Co. (Amlak) is a Saudi joint stock company that offers real estate finance products and services in Saudi Arabia. The company has a total capital of SAR 906 million.
and 90.6 million. outstanding shares, of which the Bank holds 20.3 million shares or 22.41% of the outstanding shares. The Bank solid 30% of its shares in Amlak during 2020 as part of Amlak’s Initial Public Offering.
Regulators
SAIB maintains healthy relations with its regulators and ensures it complies with all applicable rules and regulations.
Zakat settlement
In December 2018, the Bank agreed with the GAZT to a settlement of Zakat assessments for the years 2006 to 2017 for SAR 775.5 million. The discounted Zakat liability of
SAR 711.8 million. was fully provided for through a charge to the Consolidated Statement of Income with the corresponding liability included in other liabilities as of December 31, 2018. The Bank has paid SAR 155 million, SAR 124 million. and SAR 124 million on January 1, 2019, December 1, 2019 and December 1, 2020 respectively, as per the settlement agreement.
The undiscounted Zakat settlement liability remaining to be paid and the net discounted Zakat liability is as follows:
SAR ’000
December 1, 2021
124,072
December 1, 2022
124,072
December 1, 2023
124,072
Undiscounted Zakat settlement liability
372,216
Less: Discount
(27,579)
Net discounted Zakat liability
346,637
The Zakat settlement also included provisions for the Bank to calculate the Zakat liability for the year ended December 31, 2018 using the same methodology as was agreed in the settlement for the prior years. The 2018 Zakat was calculated based on this method and was also charged to the Consolidated Statement of Income in 2018 and was settled by April 30, 2019.
Although the Zakat settlement did not include the year 2005, the Bank provided for an additional Zakat liability for 2005 amounting to SAR 38.6 million, which was charged to
the Consolidated Statement of Income in 2018 and settled in 2019.
In 2019, GAZT published rules for the computation of Zakat for companies engaged in financing activities and licensed by SAMA. The Bank has provided for Zakat for the years ended December 31, 2020 and 2019 based on its understanding of these rules:
Withholding tax: The Bank paid SAR 53.7 million to GAZT for the year ended December 31, 2020.
Value Added Tax (VAT): The Bank paid SAR 48.2 million to GAZT for the year ended December 31, 2020.
Other regulatory payments: The Bank paid SAR 50.4 million to the General Organization for Social Insurance for its employees, including the employee share of SAR 22.6 million during the year ended December 31, 2020.
The Bank also paid SAR 1.5 million for visa and other related governmental fees during the year ended December 31, 2020.
Regulatory penalties and fines
The Bank paid SAR 1.92 million to SAMA during 2020 due to five regulatory fines and penalties.
Fines amount In SAR
Description of the fine
No. of fines
205,000
Violating SAMA’s instructions
3
1,680,000
Violating SAMA’s Instructions for Consumer Protection
1
35,000
Violating SAMA’s instructions of Self-Supervisory Guidelines
1
Affiliations
GRI Community member
SAIB retained its GRI Community membership for the year under review. The GRI Community is an inclusive and collaborative network of companies and stakeholders committed to transparency and quality sustainability reporting.
