Here’s a list of foreign banks expanding in Saudi Arabia

With Saudi Arabia implementing steady measures to diversify its economy away from the dependence on oil, international banks are taking notice. As the country pushes ahead with its privatization drive and opens up the stock market to foreign investments, several lenders are looking at expansion opportunities in the Kingdom. Recently, Saudi Arabian Monetary Authority (SAMA) governor Ahmed Al Kholifey said that one Asian and two regional banks were in advanced stages to obtain Saudi banking licenses.

Argaam takes a look at global banks that recently stepped up their Saudi operations.

Citigroup

In April, Citigroup received a license from Saudi Arabia’s Capital Market Authority (CMA) to conduct capital markets business. Following the approval, the lender said Citigroup Saudi Arabia will provide a full range of investment banking, debt and equity capital markets, markets, and securities research capabilities to its clients. “Saudi Arabia has embarked on a profound economic transformation journey, and we are excited and committed to contributing to this endeavor,” Citi’s CEO for Europe Middle East and Africa Jim Cowles said.

Citibank, which was present in the Kingdom since 1955, had lost its banking license when it sold its stake in Samba Financial Group in 2004.

Bank of Tokyo-Mitsubishi UFJ

In January, SAMA gave its approval to Bank of Tokyo-Mitsubishi UFJ, Ltd. (MUFG) to establish a branch in the country. The lender plans to set up the branch in Riyadh by 2018, becoming the first Japanese bank to offer services to clients locally. The bank said it saw growth prospects in Saudi Arabia’s plans to diversify its economy and encourage private investment. “This will create manifold opportunities, for both domestic businesses and multinational companies,” Shichito Tobari, MUFG's regional head (Middle East), said.

“Establishing a branch network in Saudi Arabia will enable MUFG to support growing client demand for financial services,” he added.

Goldman Sachs

The US-headquartered investment bank received CMA approval to trade equities in Saudi Arabia on Aug. 20, and a day later appointed Eyas Al Dossari as head of investment banking for Saudi operations. The Kingdom’s CMA approved Goldman Sachs’ request to amend its business profile in the Kingdom, authorizing the group for principal dealing, underwriter, managing investment funds, portfolio management, arranging, advising, and custody activities.

Goldman Sachs has operated in the Kingdom since 2009 as an agent and underwriter.

Credit Suisse Group

Zurich-based Credit Suisse Group AG, which had committed $600 million of its own capital to expand operations in Saudi Arabia in February this year, was recently reported to be looking for more relationship managers in Saudi Arabia in an expansion bid. The bank said it considered Saudi Arabia a key growth market. “We consider the onshore private banking presence as a natural progression to further build our local footprint,” Bruno Daher, head of private banking (Middle East) at Credit Suisse, was quoted as saying by Bloomberg.

Regional Banks

Major lenders from the GCC — such as United Arab Emirates’ First Abu Dhabi Bank (FAB) and Emirates NBD — are also working on expansion opportunities in the Kingdom. Dubai-listed Emirates NBD has unveiled its plans to add 20 more branches in Saudi Arabia, after it received SAMA’s approval to open three new branches in April. The bank, which at the beginning of the year had only one branch in Riyadh, plans to open another in the capital city and one each in Jeddah and Al Khobar.

FAB, meanwhile, is said to be is studying expansion through either acquisitions of existing banks or by obtaining a new banking license.

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com