Citi eyes Saudi capital market return
Banking group applies for licence after about 13-year absence
Citigroup has formally applied for a licence to conduct capital markets business in Saudi Arabia, two sources familiar with the matter said, in a move to return to the country after an absence of nearly 13 years.
The application has been made with Saudi Arabia’s Capital Market Authority (CMA), whose primary role is to regulate and develop the capital market in the kingdom, the sources said.
Investment opportunities in the kingdom are opening up as the government diversifies its economy away from oil under its National Transformation Plan. The government is also preparing to list up to 5 per cent of oil giant Saudi Aramco in an initial public share offering that could raise as much as $100 billion (Dh367.3 billion). After operating in the kingdom for five decades, Citigroup pulled out of Saudi Arabia in 2004 when it sold its 20 per cent stake in Samba Financial Group, saying then it was reallocating capital to core investments. In 2015, it won permission from the Saudi Arabian regulator to invest directly in the local stock market, the first step towards returning to the country.
Citi had approached bankers about potential jobs in anticipation of the bank gaining a licence and building a team in the kingdom, one of the sources said.
Citi declined to comment on its Saudi plans. No one at the CMA was immediately available to comment. Citi is “positive” that it will gain a licence this year, a third source said.
If successful, Citi could also pursue with the Saudi central bank permission for a full bank branch licence, potentially joining other banks such as JPMorgan and Deutsche Bank .
Citi is not the only global bank looking to expand in Saudi Arabia. Credit Suisse is also seeking a banking licence, as it wants to build a fully-fledged onshore private banking business there, the bank told Reuters in an email in late February.
Goldman Sachs is also exploring the possibility of gaining a licence from the CMA to conduct share sales and trading in Saudi Arabia, a source briefed on the plan said. The Wall Street bank has held preliminary talks with regulators. Goldman declined to comment on that report.
There are 13 licensed foreign bank branches in the kingdom, including Deutsche Bank, BNP Paribas, JPMorgan Chase and Industrial and Commercial Bank of China.