1. We anticipate strong growth in the Kingdom of Saudi Arabia in the near term, supported by relatively buoyant oil prices, the continuing development of the non-oil private sector and a young, growing and increasingly well-educated population. Arab National Bank, which serves corporate, commercial and retail customers across the kingdom, intends to benefit from this growth with enhanced customer focus and expansion of its range of traditional and Islamic products, while continuing to manage both cost and risk.
We also believe there will be continuing positive developments in the supervisory and regulatory environment, which will further support growth and development of the banking sector, We are already seeing this, for example, in the development of the new capital markets law, the government’s privatisation programme, and by the new development of retail and institutional investment products.
2. The direct impact of the war in Iraq has been relatively muted. The moderate fall in consumer demand for consumer durables appears to have worked its way through the system. The disruption of Iraq’s oil supply has benefited the oil price. Investors have opted to focus their attention on the domestic market, particularly in the growing domestic stock market and local real estate. At the same time, we have seen increasingly rigorous and forceful government efforts on money laundering and financial crime.