Eisa Al-Eisa has presided over one of the great stories of Saudi banking, playing a leading role in recreating the institution now called Samba Financial Group as a dynamic force in a huge market that has, in the past two years, opened much wider to international competition.
When Citigroup withdrew from its long-time partner Saudi American Bank in October 2003, there was much speculation over its motives. The Kingdom’s recent economic performance had been mediocre, and Samba itself was seen by analysts to have been slipping from its past glories for a couple of years. At least one of the main ratings agencies was considering downgrading its financial stability rating.
The end of Samba’s technical management agreement with Citibank hardly seemed to be good news, threatening to cut both know-how and capital. Citigroup sold its 20% stake to the Public Investment Fund, a state fund which finances strategic commercial projects that the private sector lacks the ability to undertake alone, either because of insufficient experience or inadequate capital.
But what to outsiders may have seemed a misfortune appeared to Samba’s local management as one of those opportunities that rarely if ever comes along. Led by Al-Eisa – who had worked at the bank since its foundation in 1980, and was then deputy managing director – the local management assumed control and changed the bank’s fortunes, seemingly overnight.
In 2004, its first full year under local management, Samba increased its net income by 74% to SR2.506 billion ($668 million), delivering its best ever returns to shareholders. 2004’s return on equity (ROE) increased to 25.7%, from 16.2% in 2003. Since then, Samba’s figures have increased at rates that verge on the exponential. ROE went up to 34.5% in 2005 and was 42.6% in the first six months of 2006.
In 2005, Samba reported its highest ever net profit, up 60% to SR4.018 billion. Al-Eisa ascribed this performance to the “broad revenue base, the introduction of new investment offerings which fulfilled market needs, and the restructuring of our priorities”.
Many observers ascribe this success to Al-Eisa’s leadership and strategic sense. He has strengthened the bank’s management by attracting – and keeping – a high-grade professional team. At the same time he has positioned Samba as a leader in equity placement and financial advisory business. In 2005, Samba managed the Kingdom’s three largest initial public offerings (IPOs).
Al-Eisa has also almost doubled Samba’s customer base in just three years, to approximately 850,000, and made it the market leader in internet banking. Advancing on these broad fronts, this is an award-winning performance. —Jon Marks