RIYADH, 20 June 2007 — Merrill Lynch has received a banking license from the Capital Market Authority (CMA) to operate in the Kingdom, where it will offer a whole range of global markets, investment banking products and wealth management solutions for high net worth individuals.
At a press conference held here yesterday, Ahmass Fakahany, Merrill Lynch’s president and chief operating officer, said the company will also extend its services in areas like M&A advisory services, structured finance, equity and debt capital market. It also has expertise in the field of Islamic banking, a high growth area in this region.
Jeffrey Culpepper, managing director, Merrill Lynch International, and Eva Castillo, head of Global Private Client, Europe, Middle East and Africa, were also present.
Culpepper said Merrill Lynch would work in close cooperation with CMA. He noted that today’s emerging markets are tomorrow’s established markets. “We would like to play our role in developing the financial services sector of the Middle East, where we have been operating for the last 45 years,” he said.
Castillo said “this license represents a significant step for the firm which builds on our 45-year commitment to the region. We are excited about the expansion opportunity for Merrill Lynch in the Kingdom.” She said they would like to harness the talent of Saudis in developing their market. A training program will also be set up for young Saudis who could be groomed both in the Kingdom and in their training centers abroad.
Asked if the bank had evaluated the risks in the Middle East before making its debut on the Saudi market, Fakahany said they had considered all aspects of the situation in the region. “No area is free from risk, be it the Middle East, Europe or elsewhere. We have been operating in Lebanon. Yet, the bank did not close its operations even for a day.” He reaffirmed his full confidence in the strength of the Saudi economy and said they were convinced of their decision to enter the Saudi market.
Culpepper said they were not afraid of competition as they were already a global player with presence in 40 countries. “The Saudi market is strong enough to absorb new players. However, as it usually happens in a competitive environment, some will perform better than others. Ultimately, it is the customer who is going to benefit.” he said, adding that the bank will target high net worth individuals in the range of $1 million to $25 million and above.
On the question of Islamic banking, Culpepper said they had highly qualified experts in that field. “At one time Sokuk was viewed as an exotic investment vehicle. Now it has become so commoditized that it is probably the most prominent banking instrument in this region. So we shall continue to build on our capabilities in this area as the market grows.”
However, to start with, the bank will focus on providing advisory services to their clients. “As we grow our platform, we shall add on to those services,” he said.