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. 


Russia’s RDIF to boost investment deals in Saudi Arabia

Updated 13 min 27 sec ago
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Russia’s RDIF to boost investment deals in Saudi Arabia

  • Fund's CEO Kirill Dmitriev leads a delegation of more than 20 Russian business figures to the Kingdom
  • The delegation discussed projects in oil refining, petrochemical, gas chemical and oilfield services

RIYADH: Russian sovereign wealth fund RDIF said on Wednesday it would significantly boost its investments deals with Saudi Arabia in 2019.

The fund’s CEO Kirill Dmitriev led a delegation of more than 20 Russian business figures to the Kingdom to discuss new projects.

Saudi Energy Minister Khalid Al-Falih met Dmitriev in Riyadh and expressed his happiness on the progress they made in the talks and the cooperation between the two countries. 

“Its not only commercial cooperation, but we are also working on scientific research, and we have opened a research center in Moscow University,” Al-Falih said.

The minister said the Russian delegation will also meet officials from Saudi Basic Industries Corporation SABIC and mining company Ma’aden among other companies during their three day visit to the Kingdom.

The delegation discussed projects in oil refining, petrochemical, gas chemical and oilfield services sectors, a Russian Direct Investment Fund statement said.

Al-Falih added that the Russian side has started a rubber plant project in Al-Jubail with Total and Novomet.

RDIF already has a $10 billion investment partnership with the Saudi Public Investment Fun (PIF), with more than $2 billion already invested in projects.

“We extend our cooperation not only on oil cuts but to cooperate in oil services, technology, LG and petrochemicals,” Dmitriev said. “We believe Saudi Aramco can be one of the greatest partners of Russia.”

The CEO said they were continuing to cooperate with PIF in Saudi Arabia through a number of energy investments.

Russian companies are also keen to invest in the Kingdom’s planned $500 billion mega-city NEOM.

“We have companies that have interest to invest in NEOM, we would like to build a port in NEOM, it can be a big port,” Dmitriev said.