US lender is returning to Saudi Arabia after a 13-year absence
Citigroup Inc plans to hire about 20 bankers in Saudi Arabia and start operations by the end of the year after receiving an investment banking licence for the kingdom in April.
“The total number of people we want to have on the ground for the CMA licence is up to 20 for our medium-term plans here,” James Forese, Citigroup’s president and head of institutional clients group, said in an interview in Riyadh. “If things stay on track, then we’ll continue to invest. The opportunities here are self evident.”
The US lender is returning to Saudi Arabia after a 13-year absence. The lender 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.
Citigroup aims to have about half of its investment banking team in place by December and be fully staffed in the first quarter of 2018, the bank’s Saudi Arabia country officer Carmen Haddad said in Riyadh. With its Saudi office, Citigroup will be able to pitch for local advisory work, including IPOs and takeovers in which the target company is based in the kingdom.
The bank sees “a multitude of opportunities” in the kingdom, including privatisations where it can provide “cross-border expertise,” Forese said. Foreign investors are also preparing to invest in the kingdom’s stock market, he said.
“The equity market now is on the global map and is going to have more companies listed,” Forese said. “The market capitalisation will be larger and a lot of investors are starting to look at individual companies to understand their stories before they start to deploy resources.”
Citigroup had lead roles on the kingdom’s record-breaking $17.5 billion bond sale last year and $9 billion Islamic bond offering. Without a 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.
The bank joins JPMorgan Chase & Co, Morgan Stanley, Deutsche Bank and HSBC Holdings, which all have investment banking operations in the kingdom.