Buyback of J.P. Morgan’s stake is positive, promising: SAIB CEO

Musaed Al-Mineefi, CEO of Saudi Investment Bank (SAIB), said his company’s buyback of the shareholding of J.P. Morgan International Finance Limited into SAIB was a positive, promising deal.

JPMorgan International Finance, a subsidiary of JPMorgan Chase, held a minority stake in SAIB since 1976, and announced intent to divest it.

Yesterday, the two banks said the deal was completed, including a repurchase of 56.25 million shares, representing 7.49 percent of capital, for a total value of SAR 759.31 million, at SAR 13.50 per share SAIB is the tenth-largest Saudi bank by assets, and Saudi government arms own a major stake of 34.6 percent into it.

Al-Mineefi told Argaam in a phone call that the deal will help the bank have a better focus on its core business in Saudi Arabia, and that the acquired stake will be converted into treasury bonds, rather than being sold to external investors.

The deal was priced below book and market values, “which encouraged us to take the decision to repurchase the shareholding,” he said.

The CEO confirmed that the transaction would be finalized before September 30, 2018, after gaining regulatory approvals. The shareholding will be offered to investors via a rights issue, after securing the general meeting’s approval.