CITI IN FULL RE­TURN TO SAUDI ARA­BIA IN FIRST QUAR­TER

▶ US lender to con­tinue to build cap­i­tal mar­kets pres­ence in coun­try

The National - News - - BUSINESS - SARMAD KHAN London

Cit­i­group, which counts among its share­hold­ers the bil­lion­aire busi­ness­man Prince Al­waleed bin Talal, de­tained this month in a crack­down on cor­rup­tion by Saudi Ara­bia, will be fully op­er­a­tional in the kingdom in the first quar­ter of next year af­ter an ab­sence of more than a decade.

It is look­ing to cap­i­talise on op­por­tu­ni­ties in debt and eq­uity cap­i­tal mar­kets, the lender’s re­gional chief ex­ec­u­tive said.

“Saudi is a coun­try where we wanted to get back for a num­ber of years,” Jim Cowles, Citi’s Europe, Mid­dle East and Africa chief ex­ec­u­tive said at a me­dia sum­mit in London.

“It’s some­thing we’re look­ing for­ward to.”

Cit­i­group, which was granted a Cap­i­tal Mar­ket Au­thor­ity (CMA) li­cence in April, will of­fer in­vest­ment bank­ing, debt and eq­uity cap­i­tal mar­kets and re­search ser­vices to in­sti­tu­tional clients.

Citi lost ac­cess to the largest Arab econ­omy when it sold its stake in Samba Fi­nan­cial Group in 2004. The US bank, which has op­er­a­tions in more than 160 coun­tries and ju­ris­dic­tions, will ini­tially have 15 to 20 peo­ple in the kingdom.

Saudi Ara­bia, Opec’s big­gest oil pro­ducer and the world’s top crude ex­porter, has be­come an at­trac­tive mar­ket for the for­eign banks, as Riyadh con­tin­ues to over­haul its econ­omy af­ter oil prices fell from the mid-2014 peak of US$115 per bar­rel.

The coun­try, which still re­lies heav­ily on the sale of hy­dro­car­bons for rev­enues, aims to in­crease the pri­vate sec­tor’s con­tri­bu­tion to the econ­omy and plans to pri­va­tise state as­sets that in­clude en­ergy gi­ant Saudi Aramco. Riyadh has also tapped the lo­cal and in­ter­na­tional debt cap­i­tal mar­kets in the past two years to shore up fi­nances and bridge its bud­get gap.

Cit­i­group has worked closely with Saudi Ara­bia on debt is­suances and was the global co­or­di­na­tor on the kingdom’s de­but $17.5 bil­lion bond of­fer­ing 2016. It also worked as global bookrun­ner in the Riyadh sukuk’s of­fer­ing.

Mr Cowles de­clined to com­ment on the re­cent po­lit­i­cal moves in the kingdom and the anti-cor­rup­tion cam­paign in which some of the high pro­file busi­ness­men and mem­bers of the royal fam­ily de­tained.

“We have our li­cence as far as cap­i­tal mar­ket busi­ness [is con­cerned] we will con­tinue to build that ca­pa­bil­ity, we will con­tinue to be pos­i­tive in terms of eco­nomic growth in the coun­try and con­tinue to be pos­i­tive on the busi­ness op­por­tu­ni­ties in the coun­try,” he said.

Cit­i­group, which has close to 200 mil­lion cus­tomer ac­counts, had a record 2016 and ex­pects its busi­ness to do bet­ter still this year.

“The Mid­dle East, has been very strong. This year it is so far ahead of last year and so we look for­ward to an­other record year based on what we have seen in the first ten months,” he said.

The drop in oil prices has changed the fi­nanc­ing needs of many clients, whether sovereigns in the Ara­bian Gulf re­gion, fi­nan­cial in­sti­tu­tions or lo­cal com­pa­nies, he added.

“They had to ac­cess cap­i­tal mar­kets and they had to look at pri­vati­sa­tion and look at other way of get­ting the fis­cal bal­ance,” he said. In many ways, what is lead­ing up to open­ing up of Mid­dle East in terms of cap­i­tal mar­kets [busi­ness], and there’s more di­ver­si­fi­ca­tion in terms of the econ­omy.”

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