The establishment of the Saudi-Egyptian Bank was unanimously approved by the political and financial authorities in both countries, a Saudi member of the Saudi-Egyptian Business Council (SEBC) said recently. The final details of the bank project will now be discussed in Cairo at the end of September. The two sides, speaking independently to the Saudi Gazette, said that all pending proposals will be discussed and finalized at the meeting. Initial discussions on the project had taken place in Jeddah last month. The Saudi SEBC member, speaking on condition of anonymity, told the Saudi Gazette that there are three remaining issues to be discussed at future meetings. On the bank's seed capital, the source said that “all SEBC members” want the bank's capital to be large enough to provide “start-up capital for both public and private projects”. “The bank is not going to enter into competition with commercial banks either in Saudi Arabia or Egypt because both countries have vibrant commercial banking sectors, but the premise here is to focus on development projects with medium-term yield and relatively medium risk.” Private sector development projects will be targeted: This includes an emphasis on agriculture, with the focus on water conservation and adoption of new technologies; cloth-making for the clothing industry; power generation; water desalination; transportation outside the Cairo Greater Metropolitan Region (CGMR); and meat production. There will also be a bid to enhance the current capacity of fish and shrimp harvesting fleets; and increase ownership of economic housing and budget hospitality facilities. As for the capital contribution from the two governments, “bankers in the SEBC mentioned different sums, but there is an understanding it should not be less than half-a-billion dollars and a willingness to go up to one billion dollars”. There were no specific discussions on ownership distribution, but it was agreed that the two governments would act as guarantors and facilitators. “The presence of governments' monies in the bank is a security element for businessmen on both sides, a measure of mutual transparency, and a means to accelerate projects in the face of bureaucracy,” the Saudi source added. Egyptian members of the SEBC had told Saudi Gazette previously that it “will not be difficult” for the Saudi side to contribute up to 65 percent of the bank's capital. An Egyptian member added: “Our vision for the bank is to spearhead economic integration; to benefit from the high per capita income in the Saudi economy; substitute for increased foreign food imports into Saudi Arabia; and to achieve higher utilization of Egyptian primary and transformation industries.” Both sides have agreed that there should be a public share offering at a later stage. This would help to integrate the Egyptian and Saudi Arabian capital markets. __
