LONDON: The Bank of England will allow European banks to continue operating without creating expensive subsidiaries after Brexit, the BBC reported, the opening gambit in a tussle with the EU over London’s position as a top global financial hub.
The BoE’s decision, if confirmed, would mean European banks offering wholesale services would not face new hurdles to operating in London after Britain leaves the European Union in March 2019.
A BoE spokesman declined to comment on the report ahead of the publication at 1300 GMT of the central bank’s approach to future supervision of foreign banks, insurers and clearing houses.
By allowing EU banks to function as normal, the BoE’s announcement represents the first salvo in an expected struggle with the EU over banking rules that will decide the fate of London’s lucrative financial center for decades to come.
The central bank’s proposal indicates a much softer British position than that of the EU, which insists London-based banks will lose access to EU banking markets after Brexit and wants to pull some key banking business back.
London vies with New York for the title of the world’s financial capital, dominates the $5.1-trillion-a-day global foreign exchange market and is home to more banks than any other center.
But many other EU capitals see London’s Brexit tumult as an opportunity to grab new business.
Countries such as France, Germany and Ireland are wooing banks based in London to move operations to them after Brexit.
Earlier this year, BoE Governor Mark Carney called for Britain and the EU to recognize each others’ bank rules after Brexit, or risk a potentially damaging hit to financial services across Europe where many companies depend on London for funding.
The EU’s top Brexit negotiator Michel Barnier this week reiterated his stance that London stands to lose access to the EU banking market if it sticks to its plan to impose new controls on migration, one of the conditions for membership of the single market.
The EU has already proposed that clearing of euro-denominated derivatives, which are done mainly in London, could move to the euro zone after Brexit, if there is no comprehensive Brexit deal between EU and UK regulators.
The tough EU line on banking is extremely sensitive for the United Kingdom which collects over £70 billion (SR351.07 billion) a year in tax from the financial services sector.
So far, British Prime Minister Theresa May has largely conceded to the EU on the structure, timetable and substance of the negotiations.
A later version of the BBC story removed a reference to the BoE proposing that EU banks would be allowed to operate as usual even if no divorce deal was struck between London and Brussels.
The BoE’s proposal indicates both Britain’s concern to preserve London as by far the biggest global banking center in its time zone but also worry about the potential regulation that the EU could impose on banks after Brexit.
May has said Britain will leave the EU’s single market, raising questions about how companies in Britain will do business in the bloc after Brexit, and how European companies can operate in Britain.
The City of London welcomed the BoE’s move.
“Allowing European wholesale banks to operate as normal in the UK after March 2019 is a welcome bit of news to end the year for the City,” said Catherine McGuinness, the head of the City of London Corporation.
The BoE move could also be a gesture of goodwill aimed at softening European Commission plans, due to be published on Wednesday, to stiffen the rules for non-EU investment banks which operate inside the bloc.
Many of those banks, like Goldman Sachs and Morgan Stanley have their main European operations in London at present, though they are making plans to move some operations to EU centers.
The BoE has said around 10,000 financial services jobs are likely to move out of the UK immediately after Brexit in March 2019. Bankers say more may follow in the years ahead.
More than 100 banks operating in London are branches of lenders headquartered elsewhere in the EU. Currently, they operate in Britain under EU “passporting” rules which are due to expire when Britain leaves the bloc in March 2019.
The BoE had previously said it would let banks know before the end of the year whether these branches must reapply for branch licenses to operate after Brexit, or would need to be turned into subsidiaries, an option Boston Consulting Group has said could cost banks up to €40 billion.
Switching from being a branch to a subsidiary means having to build up buffers of capital and cash locally, and come under the direct supervision of the Bank of England.
EU retail banks that hold UK customer deposits above a certain threshold would have to become subsidiaries, the BoE has already said.
BoE to allow EU banks to operate in UK as normal after Brexit, BBC reports
BoE to allow EU banks to operate in UK as normal after Brexit, BBC reports
Red Sea Global offers more than 50 leisure activities: top official
RIYADH: Contrary to popular conception, sporting activities provided in the Red Sea and AMAALA are not just confined to water, but these destinations offer exciting leisure choices on land as well, said a top official.
Speaking to Arab News at the Future Hospitality Summit, Oliver Wood, senior director of Destination Development at Red Sea Global, said the destination currently offers more than 50 activities for visitors.
Wood said that RSG created three business entities last year — Galaxea, WAMA, and Akun.
Galaxea provides diving experiences to visitors, while WAMA and Akun offer water activities and adventure sports respectively.
“Galaxea is a coral that’s endemic to the Red Sea. It looks like, a kind of submarine galaxy that sits below a constellation and is beautiful. Then we created WAMA which is a way for water. And then we created Akun, which to us, is obviously ‘to be’ in the moment, start when you stand, breathe, leave everything behind,” said Wood.
He added: “So, all three of these businesses work together to do something that will reduce the misconceived fact that we are just water. We are land as well. In fact, similar to our surroundings, our land was created by water. Fifty million years ago, the sea was 120 km inland and 200 m higher. So we’re finding dinosaur bones. We’ve got petroglyphs, we’ve got ancient trade routes.”
According to Wood, some of the land activities offered in the Red Sea and AMAALA destinations include biking and hiking, with RSG recently delivering electric fat bikes for visitors.
“So for us, it’s about taking you out hiking. It’s taking you biking, supercool Akun electric fat bikes that we just got delivered. So, you can go sand, and gravel wherever you want. It’s about climbing to the top of our mountains,” he added.
The RSG executive also lauded the efforts of the Saudi Sailing Federation and the Saudi Water Sports and Diving Federation in promoting water sports in the Kingdom.
“The Saudi Sailing Federation, Saudi Water Sports and Diving Federation, they’re bringing this sport to the forefront. So, together we’ve created this blueprint so that you have more Saudis in the water, more tourists that are going in the water,” he noted.
Wood said that the availability of e-foils is one of the major attractions in the destination.
“E-foils is a surfboard that’s electrified, has this fin in the middle that pushes you above the water, so you glide through it without any friction. That is one of the most popular things we do. It is really good fun,” said Wood.
He added: “You can kayak through mangroves. And, then below the water is incredible. It’s one of the most well-preserved reefs in the world, and we’re very lucky to be working with KAUST on the scientific side.”
According to Wood, Galaxea is not just a diving brand, but it will allow visitors to understand the beauty and value of nature.
“There are lots of rare and endangered species beneath the water and it’s just incredible. It is a beautiful experience that allows you to reset your mind and just have a beautiful time in the Red Sea,” said the RSG official.
He revealed that RSG brand Corallium, which is a marine life institute, will help travelers understand more about protecting, preserving, and supporting water ecosystems.
Wood added that Corallium would also help divers communicate with experts in real-time, as they enjoy the beauty of the marine world.
According to the RSG website, Corallium can host 650 people at one time, and guests will be able to walk underwater, snorkel with rare species, participate in lab tours as well as dive into the depths of the Red Sea in a submarine.
“So as a diver, so you go snorkeling, you’re kind of shut off from it and experiencing it. Then you can speak to somebody afterward and understand.
“We try and extend that a bit further. you actually get to go out in these experiences and dive with a full face mask, communicating in real-time, under the water with our team,” he noted.
Wood also revealed that RSG has plans to create a scuba spa, where people can enjoy the silence in water.
Talking about the multiple options available for travelers in the Red Sea, he said: “You can be in the middle of desert dunes, you can be out in granite mountains. You can even go down to volcanoes. We have incredible volcanic lava fields that sit close to us. And then you can be in the water. You can be in front of 600-year-old pillars of coral reef. You can go through caves into the water.”
Wood also hinted that RSG is working toward offering Red Sea and AMAALA destinations to people who fall both in the luxury class and the middle range.
“We’re trying to show generosity in the value that we offer everybody there. We’ve tried to not only benchmark globally but try and push it right down so it is accessible to everybody and so that everybody can come and really enjoy it,” said Wood.
He added: “For me, it’s about building things around that enable people to come and get involved with it. So there are all sorts of things that we’re working on right now that will be revealed and are coming up.”
BlackRock, PIF launch multi-asset investment management platform in Riyadh
- First-of-its kind partnership aligns with PIF’s initiatives to drive further growth of the Saudi capital markets ecosystem, sector
- It will be anchored by an initial investment mandate of up to $5bn from PIF
RIYADH: BlackRock Saudi Arabia and the Public Investment Fund signed a memorandum of understanding on Tuesday which entitles the former to establish a Riyadh-based multi-asset investment platform.
It will be anchored by an initial investment mandate of up to $5 billion from PIF, subject to the achievement of agreed milestones between the parties, said a media statement.
Both parties have expressed the intention to establish BlackRock Riyadh Investment Management, which will encompass investment strategies across a range of asset classes. It is expected to be managed by a Riyadh-based portfolio management team and supported by BlackRock’s global asset management platform.
Larry Fink, BlackRock’s CEO, said: “We are excited to build on the deep partnership we have developed with PIF over many years to launch this first-of-its-kind international investment management platform in Saudi Arabia.
“The continued growth of the Kingdom’s capital markets, and diversification of its financial sector, will contribute to future prosperity for its citizens, the competitiveness of its companies and the resilience of its economy.”
Saudi Arabia has become an increasingly attractive destination for international investment as Vision 2030 comes to life, according to Fink.
He added: “We are pleased to offer investors from around the world the opportunity to take part in this exciting, long-term opportunity.”
Yazeed Al-Humied, PIF’s deputy governor and head of MENA (Middle East and North Africa) Investments, said: “PIF’s relationship with BlackRock is well established and growing. This new landmark agreement represents a step forward in PIF’s work in making the Saudi investment and asset management market more internationally diverse and more dynamic.”
As Saudi Arabia continues to transform its economy, BRIM will seek to support foreign institutional investment into the Kingdom and further enhance the Saudi asset management industry, broadening local capital markets while driving investor diversification across asset classes, facilitating knowledge sharing and the development of Saudi-based asset management talent.
BRIM will be fully integrated with BlackRock’s investment capabilities and operating platform, benefiting from global market expertise.
The non-binding memorandum is subject to satisfying certain necessary conditions, regulatory approvals, and fulfilling specified milestones.
Hospitality brands sign deals to expand in Saudi market
RIYADH: Top hospitality brands signed deals at the Future Hospitality Summit in Riyadh to capitalize on the opportunities available in the Kingdom.
France-based Accor Group said it will strengthen its position in the Kingdom with the addition of more than 25,000 rooms and the launch of a wide variety of brands.
The global hospitality group also recently launched Accor One Living, an initiative offering specialized knowledge in mixed-use and branded residential development.
Ladun Investment Co. signed an agreement with Cheval Collection. The partnership encompasses multiple contracts for the construction and operation of Cheval Ladun Living, which is a hotel apartment tower located on King Fahd Road, near the King Abdullah Financial Center in Riyadh.
The deal represents Cheval Collection’s inaugural project in Saudi Arabia, featuring 130 residential units of varying sizes, from one to three rooms, alongside amenities like a gym, a swimming pool, and a sauna.
The project’s construction is scheduled to begin this year and will be completed in 2027.
Marriott International, Inc. and Al Qimmah Hospitality, a subsidiary of BinDawood Trading, signed an agreement to bring the JW Marriott brand to Jeddah.
Located on the Jeddah Corniche, the hotel is expected to become a prime destination for luxury-seeking travelers who desire a waterfront escape.
“The signing of JW Marriott Hotel Jeddah continues to reflect the strong growth opportunities for our luxury brands across the Kingdom. As part of the country’s Vision 2030 framework, Jeddah continues to build itself as a leisure and business destination,” Chadi Hauch, regional vice president of Marriott International, development of the Middle East, said in a press statement.
On behalf of Al Qimmah Hospitality, Abdul Razzaq BinDawood commented: “We will leverage our expertise and experience in the retail and hospitality sectors to make JW Marriott Hotel Jeddah a successful addition to the city’s landscape.”
Baheej Tourism Development Co., a joint venture between ASFAR, the Saudi tourism investment company owned by the Public Investment Fund, and the Tamimi-AWN Alliance, signed a deal with Kerten Hospitality.
The agreement grants Kerten Hospitality management of Baheej’s hotel in Yanbu under the premium Cloud 7 brand.
Cloud 7 is an innovative hotel and residential lifestyle brand, recognized for its designs, check-in lobbies, healthy food options, and retail boutiques.
“Baheej’s collaboration with Kerten Hospitality underlines our core principle: empowering partners and subsidiaries through our expansive network,” Fahad bin Mushayt, CEO of ASFAR said.
The PIF-owned company also signed agreements with Mantis and KMC to manage the operations of Al Baha Mountain Lodge & Adventure Park.
Cashless payments in Saudi Arabia to rise by 7.6% in 2024
RIYADH: Cashless payments in Saudi Arabia are expected to surge by 7.6 percent in 2024 to SR550 billion ($146.8 billion) as compared to SR511.5 billion the previous year, a report said.
The report issued by GlobalData, a London-based data analytics and consulting company, projected the Saudi card payments market to grow at an annual rate of 6.4 percent between 2024 and 2028 to reach SR705.2 billion.
The uptick comes amid the Saudi government’s push for a cashless society by encouraging consumers to switch to cards for financial transactions.
“While cash has traditionally been a preferred method of payment in Saudi Arabia, its usage is on the decline in line with the rising consumer preference for electronic payments,” said Ravi Sharma, a lead banking and payments analyst at GlobalData.
He added: “The country has a robust digital payment infrastructure, supported by a developing card market and a well-established card acceptance infrastructure.”
Sharma further noted that Saudi Arabia’s government is taking effective steps to enhance the infrastructure in the country by encouraging merchants to adopt at least one electronic payment option apart from cash.
The report, however, added that cash remains an integral part of the Saudi consumer payments landscape, particularly for lower-value transactions, but the usage of hard currency is showing signs of decline.
Promoting digital payments is crucial for Saudi Arabia, as the Kingdom’s Vision 2030 aims to reduce cash transactions and increase the share of electronic payments to 70 percent of all transactions by 2025.
“The (COVID-19) pandemic changed the way Saudi consumers make payments, with an increasing number of consumers preferring contactless payments,” said Sharma.
He added: “Contactless cards have been on the rise in the country with the Saudi Arabian central bank reporting 363.4 million transactions using NFC-enabled mada cards in February 2024 compared to 331.7 million in February 2023.”
In terms of card preference, debit cards dominate the overall card payment space, accounting for 85 percent of the overall card payment value in 2023.
GlobalData pointed out that the government’s financial inclusion initiatives, consumers’ preference for debt-free payments, and prudent consumer spending have resulted in the domination of debit cards in the Kingdom.
“Saudi consumers are gradually embracing electronic payments, moving away from cash, supported by government push, improvements in payment infrastructure, growing consumer awareness, and rising adoption of newer technology like contactless,” added Sharma.
In April, data released by the Saudi Central Bank revealed that payments made through point-of-sale terminals in the Kingdom experienced a significant 20 percent annual increase in February, totaling SR53.72 billion.
The largest portion of POS spending in February was allocated to beverages and food, comprising 15.7 percent or SR8.43 billion.
This was followed by spending on restaurants and cafes, accounting for 15 percent of the total, reaching SR8.02 billion.
Saudi Arabia, China discuss collaboration in urban development during Beijing meeting
RIYADH: Saudi Arabia and China stand to gain by sharing expertise in city planning, sustainable urban development, and construction technology as officials from both sides met in Beijing.
Saudi Minister of Municipal and Rural Affairs and Housing Majid Al-Hogail and Chinese Minister of Housing and Urban-Rural Development Ni Hong held discussions to explore cooperation opportunities in developing housing policies and programs for residential communities.
This move extends from the Chinese President’s visit to the Kingdom in December 2022 and the agreements signed between the two nations during that time.
Following the meeting in Beijing, Al-Hogail stated in a post on X: “Our leaders have completed an agreement on the importance of strengthening the partnership and aligning Saudi Vision 2030 with the Belt and Road Initiative, which will reflect positively on the aspirations and economic standing of Saudi Arabia and China globally.”
He added: “We are working to enhance fruitful cooperation between the two countries in various fields including developing urban areas and attracting the best Chinese construction companies to benefit from their expertise in enhancing housing units in various regions of the Kingdom, with the aim of achieving the goals of the housing program — one of the programs of the Kingdom’s Vision 2030 — by providing various housing and financing options for citizens.”
Furthermore, the two countries reviewed successful experiences in providing housing solutions and options, along with enhancing opportunities for citizens to own homes. They also discussed ways to facilitate the exchange of experiences in urban management and the application of best practices in this regard.
The meeting was part of an official visit by Al-Hogail to the Chinese capital. During his visit, he is scheduled to meet with senior officials in the Chinese government, heads of construction companies, and banks to strengthen the partnership in the construction sector. The trip also aims to attract top international companies in real estate development.
