Citigroup Gets Saudi Investment Bank License After 13 Years

Updated on
  • Lender made unsuccessful attempts to return in 2006 and 2010
  • Carmen Hadded said to be appointed CEO of bank in kingdom

After 13-Years, Citigroup Is Back in Saudi Arabia

After a 13-year absence, Citigroup Inc. is back in Saudi Arabia.

The bank received a license from the kingdom’s regulator “to provide a full range of investment banking, debt and equity capital markets, markets and securities research capabilities to local and international institutional clients," it said in a statement Tuesday.

The announcement seals Citigroup’s return to the kingdom after it lost its license when it sold its stake in Samba Financial Group in 2004. Saudi Arabia is becoming more attractive to foreign lenders as it overhauls its economy and plans to list Saudi Arabian Oil Co., or Aramco, in what could be the largest-ever initial public offering. The New York-based bank tried unsuccessfully to return to the country in 2006 and 2010.

“The Aramco deal marks the opening up of Saudi Arabia and Citigroup wants to be there to take advantage of that,” said Christopher Wheeler, a London-based banking analyst at Atlantic Equities LLP. Citigroup “has a history in the Middle East, hence it’s a no brainer. No quick return, but a ticket to the party.”

Task Force

Citigroup has pushed to secure a license in recent months. The bank set up a company wide task force to target business opportunities in Saudi Arabia, and started sounding out potential staff in expectation that it would get a license, according to people aware of the matter. The lender appointed Carmen Haddad as chief executive officer in the kingdom to rebuild its business there, people said earlier this month. CEO Mike Corbat discussed the bank’s plans with Prince Alwaleed in Riyadh in March.

Saudi Arabia is “a strategically important market for Citigroup," Jim Cowles, Citigroup’s CEO for Europe, the Middle East and Africa said in the statement.

The bank had lead roles on the kingdom’s record-breaking $17.5 billion bond sale last year and $9 billion Islamic bond this month. Without the CMA license, lenders face restrictions on working on deals that are signed in Saudi Arabia or takeovers in which the target company is based there.

Citigroup joins JPMorgan Chase & Co., Morgan Stanley, Deutsche Bank AG and HSBC Holdings Plc., which all have investment banking licenses in the kingdom.

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