Banque Saudi Fransi faces fine over regulatory violations

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Banque Saudi Fransi (BSF) faces a fine over irregularities in an employee incentive program, Saudi Arabia’s central bank said on Thursday.

The Saudi Arabian Monetary Authority (SAMA) did not specify the size of the potential penalty, but said in a statement that it found the bank had violated some governance and supervisory regulations.

SAMA also noted that the bank, the kingdom's fifth largest by assets, was taking legal action against individuals to recover funds taken under the incentive program, but it gave no indication of how many funds were involved and did not elaborate on what the irregularities were.

SAMA first announced last month that it was monitoring measures taken by the BSF board of directors to address “deficiencies” in the bank’s governance.

BSF issued a statement via the stock exchange on Thursday saying that it was coordinating with authorities to recover the funds, which would be accounted for as “additional profits” for previous periods, and hold culprits responsible.

The bank also said it did not expect any significant changes in its financial statements and had put corrective measures in place to avoid future abuses.

A BSF spokesman was not immediately available to comment further.

The bank let go Chief Executive Patrice Couvegnes last week after six years in the role, although a source told Reuters the step was part of “normal procedure” related to the shareholder change agreed in September.

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