Dr. Bernd van Linder, the Managing Director of Saudi Hollandi Bank (SHB), has submitted his resignation effective December 31, ending a ten-year tenure with the first banking franchise in Saudi Arabia.
Van Linder is leaving the bank for personal reasons after reached an impressive list of milestones in his one-decade existence. SHB is now the country’s eighth largest bank and accounting for 3.9% of total banking assets in Saudi Arabia.
According to a regulatory filing, Saudi Hollandi Bank said it will name a successor before the end of the year. In addition, the bank said its management will hold a meeting with shareholders on October 31, 2016 to discuss changing the name of the kingdom’s oldest lender.
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The banking sector in Saudi Arabia is of course connected to the Saudi economy which is now facing huge difficulties on the backdrop of lower oil prices, as well as ongoing regional unrest, including the Yemen war.
Earlier in April, rating agency Moody’s has downgraded Saudi Arabia’s banking system from stable to negative stating it feared the falling oil prices would adversely impact the country’s banking system.
The oil price has fallen from above US$110 per barrel two years ago to about $50 now, hitting state budgets and investments in a region dependent on the government for growth.
Rapid spending cuts have also taken their toll. The kingdom lowered public spending in the fourth quarter of the year, trimming its budget deficit from an expected 21 per cent of GDP to an actual 15 per cent, and it plans to cut spending further this year.