Saudi Arabia 2016 | FINANCE | INTERVIEW

TBY talks to Bernd van Linder, Managing Director of Saudi Hollandi Bank, on the state of the banking sector, the role of the institution in society, and fostering cross-sector synergy.

Bernd van Linder
Bernd van Linder is the Managing Director of Saudi Hollandi Bank. He is also Director of Saudi Hollandi Capital, the bank’s wholly owned investment banking subsidiary, and of Wataniya, the bank’s general insurance affiliate. Before assuming the position of CEO in May 2009, Bernd was Treasurer of Saudi Hollandi Bank. He came into this role in 2006 from ABN AMRO Bank, where he held a variety of positions over a 10-year career. Bernd holds a PhD in artificial intelligence from Utrecht University, an MSc in computer science from Nijmegen University, and an MBA in finance from Bradford University.

How healthy is Saudi Arabia's banking sector?

Thanks to supportive government policy and wise and strict regulation, the economy is doing well, despite the challenges brought by low oil prices. Across the sector, Saudi banks have high levels of capital and liquidity, and strong leverage ratios. All banks in the Kingdom are sound and solid, and are in an excellent position to continue supporting the Saudi economy. Finally, Saudi banks' non-performing loans are the lowest in the region, whilst coverage of those NPLs is among the highest in the world. In light of all this, Saudi banks and the banking sector will continue to perform well in the months and years ahead.

How would you assess the contribution of your institution to the economic and social development of Saudi Arabia?

We were the first bank in the Kingdom, established in 1926; hence, we clearly are grounded in, and are an integral part of, the development of the Kingdom. For about 30 years, we were the only bank in Saudi Arabia, and for part of that time we acted as the central bank to the Kingdom. We were also the first Saudi bank to facilitate a transaction with Aramco. Moving to today's day and age, we are an active player in supporting SMEs, the development of which is crucially important to the Saudi economy. The recent announcement of the set-up of a ministerial commission to support the development of SMEs is a clear sign of the importance attached to these companies. Amongst others we support the development of SMEs by being a major player in the Kafala guarantee scheme for SMEs, but we also provide non-financial support to help SMEs in their growth and development. In addition to SMEs, we are also active in supporting Saudi families in owning their home. We were one of the first two banks to work with the Real Estate Development Fund (REDF), with the aim of providing additional financing to Saudi nationals so they can own their homes. We continue to be an active player in that space, working with the REDF and government institutions on a range of initiatives to increase home ownership among Saudi families. Additionally, we support the training and professional development of Saudi nationals. We have a long established and well-regarded training and development program for fresh Saudi graduates through which we integrate them into the bank. As part of our corporate social responsibility agenda, we also, for example, work with Microsoft on developing programming skills in the Kingdom. It has become a significant and successful program, and it is something that we continue to invest in.

As the government-funded projects start to slow down, what synergies can develop between the banking and private sectors?

Investments will continue, as the government has said many times, and will in my opinion primarily concentrate on energy, water, education, and the medical sector. Major opportunities will arise in privatization and PPPs, which is something that the government has already alluded to. We have already seen PPPs for the water and energy sectors, and it is logical to expect to see it happen in other sectors in the future as well. At that point, synergies would develop between the banking and private sectors, as banks will play a major role in financing those partnerships. The same is true for outright privatizations, where banks will provide financing to the companies providing the privatized services.

What are your goals and expectation for 2016 as Saudi Hollandi Bank?

As we have done throughout our almost 90-year history, we will continue to focus on meeting our customers' requirements, across retail, small, medium and large corporates. By meeting those requirements, we are confident we will be able to deliver yet another year of strong performance.