NCB to benefit from hierarchal allocation system: Amwal

The hierarchal allocation system should be applied at the National Commercial Bank as a better option for small investors, said Fahd Alqasim, head of Amwal’s financial consultancy group.

He added that it’s a better tool than the pro-rata option that lets subscribers receive only the minimum of the full shares subscribed.

If the NCB starts applying the hierarchal allocation system, it could have a significant impact on the banking sector and the kingdom’s market as a whole because government ownership reassures investors, Alqasim said in an interview with CNBC Arabiya.

He added that banks were preparing to provide SAR 50 billion in loans to customers in order to motivate them to subscribe to NCB shares. He also said that some banks offered their employees interest-free loans in order to encourage them to invest.

In regards to the NCB’s upcoming plans, Alqasim said the president of the kingdom’s Sharia authority is committed to Islamizing the bank’s services.

He added that details of the plan should soon be revealed, and approved by the public.