Exclusive - A Houthi plan to nationalize a number of banks

Well-informed banking sources in the Yemeni capital, Sanaa, revealed a new Houthi trend to completely nationalize the banking sector, after years of fighting it, exercising the most severe types of restrictions that paralyzed its movement.

The Houthi militia deliberately created crises on the banking sector, starting with the liquidity crisis, and forcing them to sell their financial positions in foreign currency in favor of Houthi traders to secure their imports of goods from abroad, with the aim of thwarting it and bringing it to the point of declaring bankruptcy. Sources told Khabar Agency.

The banks in the Houthi areas have been in a state of paralysis since 2016, as the militias in the central bank froze their balances, and in turn became unable to fulfill their obligations to customers and depositors, which made them lose the confidence of customers who refrained from dealing with banks, preferring exchange companies over them.

In light of these circumstances, the militias encouraged their leaders to establish exchange companies to provide all financial services carried out by banks, including opening accounts, receiving deposits, and providing foreign money transfers in large amounts to circumvent the restrictions imposed on the group. The sources said.

According to the sources, after the French Bank Credit Agricole (Crédit Agricole) closed its branch in Yemen, the United Bank Limited (UBL) intends to close its branch as well, in addition to the Yemen and Gulf Bank which reached the point of undeclared bankruptcy, and the limited role of the Iraqi Rafidain Bank in participating in treasury bills, which stopped two years ago in Sanaa.

According to the sources, the militias are seriously considering acquiring a number of local private banks, such as: Saba Bank, Shamil Bank of Bahrain, and Yemen and Kuwait Bank, by forcing some shareholders to sell their shares, or acquire them by decisions and orders of the specialized criminal prosecution and appointing a judicial guard over some investment activities of the banks, such as the Islamic Tadhamn Bank.

The militias intend to issue a decision to raise the banks’ capital three times what they are, to find a justification for including their leaders as partners with shares in large proportions in private banks in order to control the banking sector after years of paralysis in order to prepare for its acquisition. The sources noted.