JPMorgan subsidiary to sell Saudi Investment Bank stake for $203 million

JPMorgan International Finance, which has held a minority stake in Saudi Investment Bank since 1976, will divest its holding by selling its shares back to Saudi Investment Bank
Updated 25 June 2018
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JPMorgan subsidiary to sell Saudi Investment Bank stake for $203 million

  • A subsidiary of JPMorgan Chase & Co has agreed to sell its minority stake in Saudi Investment Bank for 759.3 million riyals ($203 million)
  • JPMorgan, which is the only U.S. bank providing both commercial banking and securities services in the kingdom, did not disclose the size of the stake or the financial terms of the deal

DUBAI: JPMorgan Chase has become the latest international bank to trim its exposure to Saudi Arabia, with an agreement to sell its minority shareholding in Saudi Investment Bank.

But the bank, the only US lender providing both commercial banking and securities services in Saudi Arabia, has insisted that it remains committed to the Kingdom, stating that the sale is part of winding-down of “non-core holdings and projects.”

Saudi subsidiary JPMorgan International Finance, which has held the stake since 1976, agreed to sell shares representing 7.49% of the SIB’s capital back to the bank for 759.3 million riyals ($202.2 million), the Saudi bank said in a statement on Tadawul on Sunday. 

The transaction was subsequently confirmed by JPMorgan in a statement sent to Reuters. 

The agreement to sell down shares in SIB comes a month after UK lender RBS agreed to sell its stake in Alawwal Bank, as part of a merger between Alawwal and SABB.

The merger — which will create Saudi Arabia’s third largest lender — comes as RBS looks to exit Saudi Arabia due to its own capital requirements. 

JPMorgan on Sunday insisted that it remains optimistic about the Kingdom’s economic prospects, and is seeking to benefit from other opportunities stemming from reforms being pushed by Crown Prince Mohammed bin Salman.

“Globally, the firm has wound-down non-core holdings and projects over the past several years and this proposed sale is consistent with that consolidation effort,” said Bader Alamoudi, senior country officer for JPMorgan, told Reuters.

“We are excited and optimistic about the kingdom’s economic prospects, the opportunities offered by Vision 2030 and our firm’s ability to support it.” 

JPMorgan is among banks advising the Saudi government on the upcoming listing of Saudi Aramco, likely to occur in 2019, which may raise as much as $100 billion.

SIB shares rose 2.1 percent on Sunday on the Tadawul, on a day when shares in most banks, financial service providers and insurers finished in positive territory. 

Arms of the Saudi government are collectively the largest shareholder in SIB, the tenth-largest Saudi bank by assets, owning 34.6 percent, according to Thomson Reuters data. 


Can a hungry Mali turn rice technology into ‘white gold’?

Updated 20 October 2018
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Can a hungry Mali turn rice technology into ‘white gold’?

  • Malians are cautiously turning to a controversial farming technique to adapt to the effects of climate change
  • Dubbed the System of Rice Intensification (SRI), the new method was pioneered in Madagascar in 1983

BAGUINEDA: When rice farmers started producing yields nine times larger than normal in the Malian desert near the famed town of Timbuktu a decade ago, a passerby could have mistaken the crop for another desert mirage.
Rather, it was the result of an engineering feat that has left experts in this impoverished nation in awe — but one that has yet to spread widely through Mali’s farming community.
“We must redouble efforts to get political leaders on board,” said Djiguiba Kouyaté, a coordinator in Mali for German development agency GIZ.
With hunger a constant menace, Malians are cautiously turning to a controversial farming technique to adapt to the effects of climate change.

 

Dubbed the System of Rice Intensification (SRI), the new method was pioneered in Madagascar in 1983. It involves planting fewer seeds of traditional rice varieties and taking care of them following a strict regime.
Seedlings are transplanted at a very young age and spaced widely. Soil is enriched with organic matter, and must be kept moist, though the system uses less water than traditional rice farming.
Up to 20 million farmers now use SRI in 61 countries, including in nearby Sierra Leone, Senegal and Ivory Coast, said Norman Uphoff, of the SRI International Network and Resources Center at Cornell University in the US.
But, despite its success, the technique has been embraced with varying degrees of enthusiasm. Uphoff said that is because it competes with the improved hybrid and inbred rice varieties that agricultural corporations sell.
For Faliry Boly, who heads a rice-growing association, the prospect of rice becoming a “white gold” for Mali should spur on authorities and farmers to adopt rice intensification.
The method could increase yields while also offering a more environmentally-friendly alternative, including by replacing chemical fertilizers with organic ones, he said.
He also pointed out that rice intensification naturally lends itself to Mali’s largely arid climate.

FACTOID

Up to 20 million farmers now use rice intensification in 61 countries, including in nearby Sierra Leone, Senegal and Ivory Coast.