Saudi Central Bank Watches Banks for Excessive Lending in Rush for Aramco IPO

Saudi Arabia is closely monitoring how much banks are lending to local investors rushing to buy shares in Aramco and what impact the mammoth offering will have on the kingdom’s financial sector, Bloomberg News reported. The Saudi Arabian Monetary Authority wants daily updates on how much credit banks are providing after it eased lending limits for buyers, according to people with knowledge of the matter. The regulator is warning banks not to breach any prudential limits after institutions were permitted to lend as much as double every riyal buyers put toward Aramco shares -- from the usual limit of 1 to 1, one of the people said, asking not to be identified because the matter is private. Officials are concerned that leverage dedicated to the Aramco IPO could potentially deprive the private sector of credit, the people said. They’re also concerned what will happen if Aramco’s share price slumps after listing, they said. Read more