Salama receives SAMA’s nod to reduce capital by 60%, to use statutory reserve to offset accumulated losses

Logo of Salama Cooperative Insurance Co.

Salama Cooperative Insurance Co. announced receiving, on May 22, the Saudi Central Bank’s (SAMA) letter confirming permission to reduce the company’s capital by SAR 150 million to SAR 100 million, according to a bourse filing today, May 23.

The central bank approved the insurer to use the entire statutory reserve balance to offset part of accumulated losses. In addition, it endorsed an amendment to the capital article in the company’s Articles of Association.

Salama will continue to fulfill all the requirements of the other official authorities. The insurer will disclose any updates in due course.

In March, the company’s board of directors recommended a capital reduction by 60% to SAR 100 million from SAR 250 million.

The board also recommended using SAR 5 million from the statutory reserve, which represents the entire value of the statutory reserve as of Dec. 31, 2021, to cover part of Salama’s accumulated losses amounting to SAR 158.767 million.