Credit Agricole to Plan Part Sale of Saudi Fransi Stake

  • French lender had planned to sell all of 31 percent holding
  • JPMorgan is advising Credit Agricole on the possible sale

Credit Agricole SA is considering selling part of its 31 percent stake in Saudi Arabian lender Banque Saudi Fransi, reversing earlier plans to completely exit the business, according to people familiar with the matter.

France’s second-largest lender has discussed the partial sale of its Saudi operations with the country’s central bank, and has started talking to potential buyers, the people said, asking not to be identified as the information is private. The bank may consider selling more of the stake in the future, the people said.

Credit Agricole has been cutting costs and refocusing on its main markets to propel growth. The bank was initially considering selling all of the Saudi Fransi stake, which is currently worth about $2.6 billion, people familiar with the matter said in March. Chief Executive Officer Philippe Brassac last year completed a $20 billion deal to sell holdings in more than three dozen regional lenders, simplifying the structure and raising capital buffers.

Credit Agricole rose 1.3 percent to 14.195 euros at 3:34 p.m. in Paris, extending gains this year to 20 percent. Saudi Fransi closed down 0.3 percent at 26.75 riyals in Riyadh on Tuesday.

JPMorgan Chase & Co. is advising Credit Agricole on the sale, one of the people said. Credit Agricole and JPMorgan declined to comment.

International banks are grappling with how to approach the Middle East’s biggest economy, which is embarking on an unprecedented diversification and privatization plan but still blocks foreign control of local banks. HSBC Holdings Plc and Royal Bank of Scotland Group Plc’s Saudi Arabia ventures are exploring a potential merger to create the kingdom’s third-largest lender with $78 billion in assets.

— With assistance by Fabio Benedetti Valentini

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