LONDON, 5 February 2007 — The National Commercial Bank (NCB) and Goldman Sachs International have signed a memorandum of understanding for the establishment of a joint venture facility to handle investment banking and asset management in the Kingdom.
The memorandum envisages a strategic cooperation agreement between Goldman Sachs and NCB Capital, a company under formation in line with the mandates of the Capital Market Authority that calls for the separation of investment banking activities from commercial banking operations.
“We are very pleased with the proposed transaction between Goldman Sachs International and NCB Capital,” Abdullah Bahamdan, chairman of the National Commercial Bank, said yesterday.
“The economies of the region, in general, and the Kingdom, in particular, are booming and present vast opportunities. The combination of NCB Capital’s presence on the ground with capable management and Goldman Sachs International’s world class product platform and cutting edge technology provides the homegrown entity the strongest possible support as it harnesses these opportunities while offering its customers a wide selection of top notch investment alternatives, “ he pointed out.
Abdulkareem Abu AlNasr, chairman of NCB Capital, said “we could not hope for a better start than what we have.
NCB Capital is the first subsidiary of a local bank to be licensed by the Capital Markets Authority. And now, with the proposed transaction with Goldman Sachs International, NCB Capital is poised to confront the challenges of a very vibrant market shoulder-to-shoulder with the world’s premier investment bank. I see a very promising and exciting future ahead of us.”
Goldman Sachs and NCB Capital intend to cooperate across a broad range of business areas in or relating to Saudi Arabia, including investment management, securities, investment banking and principal investing.
The memorandum also gives Goldman Sachs an opportunity to make an equity investment in NCB Capital.
“We are delighted to be working with NCB Capital,” said Lloyd C. Blankfein, chairman and Chief Executive Officer of The Goldman Sachs Group, Inc. “The proposed transaction represents an important opportunity for Goldman Sachs and serves to reinforce our commitment to contributing to the further development of the Kingdom’s financial markets. We are focused on building a broad business in the region and see this initiative as a key part of our strategy.”
The completion of the transaction between Goldman Sachs and NCB Capital will be subject to further regulatory requirements.