RIYADH: Plans by Saudi Arabia`s biggest bank for a $6 billion initial public offer of shares, the largest-ever equity sale in the Arab world, have run into religious controversy with some clerics suggesting it violates Islamic principles.

Securities analysts said the controversy was unlikely to sway enough investors to derail the IPO of state-owned National Commercial Bank, which is due to start next week.

`The conflict between religion and the economy in the kingdom has been negative for a long time, but this will not stop ordinary citizens from participating in the IPO,` said Mazen al-Sudairi, head of research at al Istithmar Capital in Riyadh.

`It contributes 16 per cent of lending activity in the country and it has 435bn riyals ($116bn) of assets and 345bn riyals of deposits…Bank depositors alone could be enough to cover the IPO several times.

Saudi Arabia is due to open its $550bn stock market to direct foreign investment early next year.

Sheikh Abdullah al-Mutlag, a member ofthe Council of Senior Scholars, Saudi Arabia`s highest religious body, told stateowned television this week that subscribing to the IPO was not permissible.

In response to a viewer`s question about the share offer, Mutlag said the bank had too many dealings forbidden by Islamic principles on its balance sheet.

`Religion comes above everything,` he said.

Some other clerics have reached similar conclusions. Another member of the Council of Senior Scholars, Sheikh Saad alKhathlan, said the IPO prospectus showed NCB had a high proportion of loans based on interest payments, which are banned by Islam.

Not all clerics are so negative, however.

A former imam of the Holy Mosque in Mecca, Sheikh Adel al-Kalbani, said on Twitter that NCB was similar to Al Rajhi Bank, a major Islamic bank that has already listed successfully on the stock market.

`Poor citizens, they don`t know what to do if they subscribe, they are told they don`t have faith, and if they do not, they are not patriotic..

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