The_Info_Web/20 - ORGANIZATIONS/PRIVATE/National Commercial Bank.md

aliases	category	tags	summary	location	relations	created	updated
National Commercial Bank of Saudi Arabia NCB	Private Organization	Organization Bank BCCI SaudiArabia KhalidBinMahfouz	Jeddah bank controlled by Khalid bin Mahfouz, with which BCCI concealed more than 500 million dollars of lending to its major customers, a practice auditors found continuing in 1990.	Jeddah, Saudi Arabia	type with reverse role fn owned Khalid bin Mahfouz true with his family 2 type with role end fn partner_of Bank of Credit and Commerce International held over 500 million dollars of BCCI lending off BCCI's books 1990-09 3	2026-09-23	2026-10-15

The National Commercial Bank of Saudi Arabia, based in Jeddah, was controlled by Khalid bin Mahfouz, whom the BCCI Kerry-Brown Senate Report called "the most powerful banker in the Middle East." The Houston Chronicle reported in 1992 that "Mahfouz and his family own the National Commercial Bank of Saudi Arabia."¹²

The 1986 Share Purchases

According to the Senate report, the "forced sale" that the Bank of Credit and Commerce International (BCCI) later contemplated for First American Bank was "first considered, and attempted, by BCCI, in 1986 in connection with the purchases of BCCI and CCAH stock by the Khalid bin Mahfouz, head of the National Commercial Bank of Saudi Arabia." Bin Mahfouz had bought shares of BCCI and of Credit and Commerce American Holdings (CCAH), the secret holding company of First American, "under a complex agreement that would permit him to purchase both banks, or to hold his interests temporarily with BCCI guaranteeing to buy them back at no risk to bin Mahfouz." The report continued: "After auditors for National Commercial Bank raised questions about bin Mahfouz's actions regarding BCCI, the transactions were fully unwound by 1989, leaving the First American problem for BCCI unsolved." In 1989 BCCI asked Clark Clifford to retain an investment banker to find buyers for First American, and Goldman Sachs was engaged in July of that year.¹

Parking

By 1990 the government of Abu Dhabi had become BCCI's controlling shareholder. "In September, 1990," the Senate report stated, "Price Waterhouse learned that BCCI had concealed further lending of over $500 million to its major customs by 'parking' that lending with a Middle Eastern bank, namely, the National Commercial Bank of Saudi Arabia controlled by Khalid bin Mahfouz." The auditors also found that since the removal of BCCI's chief executive, Swaleh Naqvi, the practice had continued "with the knowledge and approval of the Board representative of the controlling shareholders," the government of Abu Dhabi.³ Naqvi had been living under house arrest in Abu Dhabi since March or April 1990, where he kept some 6,000 files whose existence had not been disclosed to the auditors.⁴

1992 to 2003

The Middle East Economic Survey archive lists the closing of NCB's New York branch by the US Comptroller of the Currency in its issue of July 13, 1992.⁵ The federal court in New York recorded that the parties agreed the Saudi Public Investment Fund bought 50 percent of NCB's shares in May 1999, that it sold 10 percent to the General Organization for Social Insurance later in 1999, and that in late 2002 it agreed to buy 30 percent of the remaining shares from the bin Mahfouz family, a purchase completed in January 2003.⁶ The English judgment of 2005 records that Khalid bin Mahfouz's father sold 50 percent of NCB to the Saudi government in August 1999, and that his sons remained board members until December 2002, when the family sold its remaining shareholding.⁷

Footnotes

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1. Kerry, Senator John, and Senator Hank Brown. The BCCI Affair: A Report to the Committee on Foreign Relations, United States Senate. December 1992, ch. 7, "BCCI in the United States: Later Acquisitions." https://irp.fas.org/congress/1992_rpt/bcci/07later.htm ↩︎

2. Urban, Jerry. "Bush Said Friend's Arbusto Investment Was His Own, Not Saudi Money." Houston Chronicle, June 4, 1992. Reproduced at https://911timeline.s3.amazonaws.com/1990s/houstonchronicle060492.html ↩︎

3. Kerry and Brown, The BCCI Affair, ch. 10, "BCCI and Its Accountants." https://irp.fas.org/congress/1992_rpt/bcci/10accounta.htm ↩︎

4. Kerry and Brown, The BCCI Affair, ch. 14, "Abu Dhabi: BCCI's Founding and Majority Stockholders." https://irp.fas.org/congress/1992_rpt/bcci/14abudhabi.htm ↩︎

5. Middle East Economic Survey archive, headline listing: "US Comptroller of Currency Closes NCB's New York Branch" (July 13, 1992). https://archives.mees.com/issues/1013/articles/37187 ↩︎

6. In re Terrorist Attacks on September 11, 2001, 349 F. Supp. 2d 765 (S.D.N.Y. Jan. 18, 2005), footnote on the sale of NCB shares. https://static.case.law/f-supp-2d/349/cases/0765-01.json ↩︎

7. Mahfouz v Ehrenfeld [2005] EWHC 1156 (QB), Eady J, May 3, 2005. https://caselaw.nationalarchives.gov.uk/ewhc/qb/2005/1156 ↩︎