“The new Basel framework requires that significant minority investments in financial entities, where control does not exist, be excluded from a bank’s capital by deduction of the equity and other investments under certain conditions, may be consolidated on a pro rata basis. National accounting and/or regulatory practices would determine the threshold above which minority investments will be deemed significant and be therefore either deducted or consolidated on a pro rata basis”.

SAMA requires that all significant minority interests in banking, securities or other financial entities that exceed 10% of the outstanding equity shares are a substantial minority investment and are to be deducted at 50 percent from Tier 1 capital, and 50 percent from Tier 2 capital.