Citigroup, the American investment banking and financial services multinational company is reporting that it has obtained formal approval from Saudi Arabia’s Capital Market Authority to begin its investment banking business in the Kingdom.
Over a dozen foreign banks are now licensed to operate branches in Saudi Arabia, competing for business as a result of the Kingdom’s new reforms aimed at weaning its economy from the dependence of oil revenues alone.
Citigroup is ranked 4th by assets on the list of largest banks in the United States and is one of the Big Four banks in the US, along with Wells Fargo, Bank of America and JPMorgan Chase.
Sources told Reuters earlier this month that Citigroup was among the banks invited to pitch for roles in the stock market listing of Saudi Arabia’s oil company Aramco, in an initial public offering that aimed to raise $100 billion.
Mike Corbat, chief executive of Citigroup said in a statement that Saudi Arabia is a regional economic leader and a strategically important market for his bank. After an absence of almost thirteen years, Citigroup Saudi Arabia acquired a capital markets license in April last year allowing it to return to the Kingdom.
The company pulled out of Saudi Arabia in 2004 after 50 years of presence there when it sold its 20% stake in Samba Financial Group.
However, it obtained permission from the Saudi Arabian regulator in 2015 to invest directly in the local stock market, this was the first step paving the way for its return to the Kingdom. And it acquired a license last year permitting it to offer services such as investment banking, debt and equity capital markets as well as securities research to its local and international institutional clients.
Citi’s Country Officer in Saudi Arabia, Carmen Haddad said that its recent board meeting in Riyadh was as a result of efforts to re-establish an onshore operation to serve their clients in the Kingdom.
Last year, Haddad told Reuters that the bank is willing to hire up to 20 bankers in the Kingdom to capitalize on investment banking opportunities that arise from the kingdom’s economic reform program.
Citi has also been appointed by Saudi Aramco to lead a $2 billion financing backed by Britain, and guaranteed by UK Export Finance, the British export credit agency.