An expert businessman like Alsubaie, may Allah bless him, knows that competition for market share is a continuous activity that never stops unless he stops developing. As safety & peace was gained in Hijaz under the Saudi rule, business flourishes especially money exchange, thus Mohammad has entered that world trading in a small store. He was buying foreign currencies from pilgrims then sell them to exchangers as he used to buy currencies in exchange of gold. Alsubaie remembered that Indian currency of 1000 rupees note was in high demand between pilgrims at that time, in addition to Iraqi dinar as well as Turkish & Iranian currencies etc.
In 1938, Mohammad and his brother Abdullah established (Mohammad & Abdullah Ibrahim Alsubaie Company for Trading and Money Exchange) with Mohammad being the Chairman and Abdullah the Vice Chairman.
Because of the fluctuations in currencies, and in order to keep the secrecy of correspondence of Telegraph, Mohammad and his agents used some codes i.e. using garden cress for gold, myrrh for silver, clove for cardamom, sheep for coffee and rice for fabric. Therefore, when the agents said: “buy garden cress or myrrh” they meant gold or silver.
Telegraph was used for communication with the agents as it is the quickest way. Using the phone for instance takes 3 days of queue to make a phone call.
Exchange Rate:
Speaking about how to determine exchange rate during the fifties, Alsubaie said: “The main determinants of market are supply & demand, so whenever there is plenty of any currency, its price will go down and vice versa, in addition to what our agents in Riyadh, Kuwait or Bahrain would inform us about their rates.”
When the oil was discovered, the welfare has improved a lot to use airplanes as means of transportation which helped in flourishing businesses; increased money exchange, buying of gold and other precious metals and the dollar had been introduced to the open market which reed it more.
People who would like to send money gathered around the airport the previous day of departure with their bags of gold and currencies buried there for security, to be sent in the following morning with one of the passengers.
The company grew to open branches in Jeddah, Riyadh, Madinah and Khobar. Then, Mohammad and his brother moved to Jeddah in 1939. In 1957, he moved again to Riyadh where they built the first 30 story building in the city.
The brothers diversified the their business to include reals estate, petrochemicals, food, home & office furniture, fabrics, building materials, agriculture and charity. The company became on of the top 50 largest companies in Saudi Arabia.
Foundation of Bank Albilad:
After the terrorists activities in KSA in 2004, the government decided to gather all money exchangers in one entity to prevent terrorists from utilizing their business activities. Therefore, Saudi Arabian Monetary Authority (SAMA) evaluated the existing exchangers who were 8 and they united the ones who agreed to. Alsubaie company took 42% of shares.
Foundation of MASIC:
After 80 years of working together, the next generation of the brother sons have to carry on the business and in order to do that, they had to split everything apart, so they did in only few months without the need of courts or lawyers (details are available in alsubaie’s book). MASIC was established in 2011.