The Bank of Sudan has overseen a period of change in the country’s banking sector.

SUDAN’s banking industry has undergone a comprehensive overhaul over the last four years. The paid-up capital that banks are required to hold has been more than doubled, from $12 million to $25 million, risk management has been improved, there is greater transparency, and corporate governance has been strengthened.

Dr. Sabir M. Hassan, Governor of the Bank of Sudan, acknowledges that the sector is still “fragile,” after the recent changes, but he is optimistic about its future. “We are satisfied with the results we have achieved. These successes are being consolidated, and banks will be encouraged to merge. We aim to have fewer banks that are larger and more efficient.”

This is necessary because, along with the rest of the economy, the sector has been opened up to foreign participation. At present, the number of foreign banks allowed in is being limited. Licenses have been awarded to the Al Salam Bank from the United Arab Emirates, the Emirates and Sudan Bank, Kuwait’s Capital Bank, and the Sudanese Egyptian Bank.

SABIR M. HASSAN Governor of the Bank of Sudan

“These banks are bringing in foreign investors, because most of the major shareholders are big businessmen in the Gulf and Egypt,” says Dr. Hassan.

The most recent arrival is Emirates and Sudan Bank, which is being launched in Khartoum by Dubai Islamic Bank (DIB) in partnership with other UAE institutions. DIB already has a controlling interest in Khartoum Bank that it acquired from the government last year.

The Chairman of the founding committee of the bank is Mohammed Khalfan Bin Kharbash, DIB’s Chairman and UAE Minister of State for Finance and Industry. Dr. Kharbash says UAE investors reacted enthusiastically to the opportunity to set up the bank. “Our aim is to support the economic development of Sudan.”
Already present in Khartoum, and about to move into a highly prestigious new headquarters, is Al Salam Bank, founded by a consortium of UAE and Sudanese investors.

Abdu Mahmoud Khalil, the General Manager, is enthusiastic about the prospects on offer. “The opportunities that exist here are second to none in the whole of the Middle East,” he observes.

Byblos Bank, one of the largest banks in Lebanon, set up in Khartoum in 2003. Nadim Ghantous, General Manager of Byblos Bank Africa, says he does not expect more foreign banks to enter the market. “More are interested, but the governor of the central bank does not want to annihilate the local players by allowing them in.”

Banking in northern Sudan follows Islamic principles. One of the big challenges posed by the CPA is the establishment of a conventional banking system in the south.

This will lead to a dual system which will result in the central bank having to deal with two fiscal authorities and two different banking systems: Islamic Sharia in the north and conventional in the south.

A further challenge will be the replacement of the Sudanese dinar with the Sudanese pound. The new national currency is due to be introduced later this year.