Citi considers Saudi expansion as banks aim to capitalize on reforms

Citi has already played an active role in Saudi Arabian finance and was one of the banks that helped to arrange the government’s $11 billion bond issue last month. (Reuters)
Updated 02 May 2018
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Citi considers Saudi expansion as banks aim to capitalize on reforms

RIYADH: Citigroup is considering seeking a full banking license in Saudi Arabia as Western banks aim to capitalize on Saudi economic reforms, with rival HSBC announcing it has won mandates for several privatizations in the kingdom.
More than a dozen foreign banks have licenses to operate branches in Saudi Arabia, battling for business resulting from the kingdom’s efforts to itself off reliance on oil revenues.
US bank Citi ended a five-decade presence in Saudi Arabia in 2004 with the sale of its 20 percent stake in Samba Financial but in 2015 won permission to invest directly in the local stock market and in January this year gained approval to begin investment banking operations in the kingdom.
“We’re looking at whether or not we should expand our activities here into a full banking license,” James Forese, the president and chief executive of the bank’s institutional clients group, said at a business conference in Riyadh.
Other banks seeking a Saudi license include Credit Suisse, while Goldman Sachs plans to expand its services in the kingdom after being cleared to trade equities there.
The banks are vying for a role in Saudi Aramco’s planned initial public offering, which could float up to 5 percent of the state oil giant and make it the world’s biggest oil company by market capitalization.
Citi has already played an active role in Saudi Arabian finance and was one of the banks that helped to arrange the government’s $11 billion bond issue last month.
The kingdom is now working on a pipeline of privatizations aimed at generating up to 40 billion riyals ($10.7 billion) in non-oil revenues by 2020 and creating up to 12,000 jobs, according to an official document published last month.
HSBC has been mandated for several of the planned privatizations and will announce them very soon, Samir Assaf, HSBC’s chief executive of global banking and markets, said at Wednesday’s conference.
The bank is “very much contributing to the privatization program,” he said.
HSBC Saudi Arabia is already acting as an adviser on the sale process for the kingdom’s flour milling sector and the Saudi Stock Exchange’s planned flotation. It also has an advisory role on the proposed Aramco listing.


Saudi Arabia and UAE launch a new joint cryptocurrency

Updated 20 January 2019
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Saudi Arabia and UAE launch a new joint cryptocurrency

  • The cryptocurrency will be limited to banks during its first stages
  • The program will also help the two countries evaluate the monetary policies of a centralized currency

Saudi Arabia and the UAE have launched a joint cryptocurrency during the first meeting of the Saudi-Emirati Coordination council Saturday in Abu Dhabi, UAE’s national press agency WAM said.

The cryptocurrency will be limited to banks during its first stages, until the governments have a better understanding of how Blockchain technology operates cross-borders.

The currency operates on the use of a “distributed database between the central banks and the participating banks from both sides,” aiming to protect customer interests, set technology standards and assess cybersecurity risks. The new program will also help evaluate the impacts of a central currency on monetary policies.

During the meeting, representatives of Saudi Arabia and the UAE also signed the Joint Supply Chained Security Cooperation program, which tests the two countries abilities to provide vital supplies during times of crisis and national emergencies, as well as share expertise and knowledge in the field.

All 16 members of the executive committee of the council followed up on the execution of the initiatives mentioned in the Strategy of Resolve.

Representatives also set five other initiatives to enhance the cooperation between the two countries, such as facilitating the traffic between ports, improving airports to make it easier for people with disabilities to travel, creating a financial awareness program for children aged 7-18, starting a joint platform to support local SMEs, and the integration of civil aviation markets,

The committee was headed by Mohammad bin Abdullah Al-Gergawi, minister of cabinet of affairs and the future of UAE, and Mohammed bin Mazyad Al-Twaijri, minister of economy and planning in Saudi. The committee will also monitor the implementation of the initiatives.