Saudi Arabia eyes digital banks, 24 IPOs in 2024: FSDP

The Financial Sector Development Program (FSDP) announced in its annual report for 2023 the plans of Saudi Arabia’s financial institutions for 2024, including the Saudi Central Bank (SAMA) and the Capital Market Authority (CMA).

SAMA’s plans for 2024

SAMA aims to keep up with best practices and international standards while maintaining the Kingdom's position and contributing to the financial sector's strength and stability.

The Central Bank also plans to update financing companies' monitoring solutions, the regulatory framework for open banking, and debt-based crowdfunding rules, in addition to developing digital solutions for supervising the financial sector.

Moreover, it aims to launch a bundle of digital banks, empower local and international FinTech companies in the Saudi market, implement the General Rules for Savings Products offered by banks, amend key principles of governance in financial institutions under SAMA’s control and supervision, and draft the SAMA rulebook.

CMA’s plans for 2024

The CMA intends to facilitate capital market financing and increase its contribution to the national economy by increasing the listing pace to 24 companies in 2024.

Furthermore, the regulator plans to encourage the development of new and promising sectors, as well as provide financing channels for them, by increasing the percentage of micro and small enterprises listed to 45% of total listings by 2024.

The CMA also eyes raising the percentage of assets under management (AUM) of the gross domestic product (GDP) to 29.4% by the end of 2024 by developing the components of the investment environment, empowering the asset management industry, and enhancing its attractiveness to investors.

Moreover, it plans to enhance the market’s attractiveness to foreign investors and boosting foreign investors’ ownership as a percentage of the total market cap of free float shares to reach 17% by the end of 2024.

The CMA also aims to develop the Sukuk and debt market and the debt-to-GDP ratio to reach 22.1% by the end of 2024.

Two out of three digital banks were pilot-launched in 2023, and the digital banks are aiming to ensure that all systems are ready for a full launch in 2024.