UAE bank to open branches in Saudi Arabia

FAB, the UAE’s largest lender, will open up to three branches in the Kingdom as part of its expansion strategy. (REUTERS)

LONDON: First Abu Dhabi Bank (FAB), the UAE’s largest lender, is poised to establish a commercial banking business in the Kingdom after being granted a license by the Saudi Arabia Monetary Authority (SAMA).
FAB will be able to open up to three branches as part of its expansion strategy that recently saw Riyadh’s Capital Market Authority (CMA) give it permission to establish an investment banking subsidiary.
The Abu Dhabi bank joins Western financial institutions that have shown an interest in operating in KSA as the economy opens in line with the Vision 2030 modernization and reform program.
Citibank, for example, started up in Jeddah in April 2017 after a gap of 13 years, making it the first American bank to put down roots in the Kingdom in more than a decade. Citi won a license to take part in mergers and acquisitions, initial public offerings, privatizations, and other capital markets business.
Goldman Sachs, which has been operating in the Kingdom since 2009 as an agent and underwriter last June won CMA approval for a license to trade equities.
Commenting on the FAB license, Tahnoon Bin Zayed Al-Nahyan, chairman of FAB, said: “In light of the recent securities license approval secured earlier this year, FAB is moving forward with the next phase of our growth plan for the KSA market.
“By providing new opportunities for customers in the region to grow stronger, this new addition to the banking landscape will be another catalyst for the continued advancement of the KSA economic agenda, and will further reinforce the UAE and Saudi Arabia’s solid relationship.”
CEO Abdulhamid Saeed said: “These developments give us the platform to tap into the region’s largest economy with the full strength and capabilities of the FAB offering, and build on the strong potential of the KSA market. We are confident that our expansion into Saudi Arabia will enhance our regional presence and will provide an important contribution to our international network.”
Headquartered in Abu Dhabi’s Khalifa Business Park, FAB’s international network spans over 19 countries outside the UAE.
Based on audited financial information as at December-end 2017, FAB had total assets of $182 billion.
Recent reports by Bloomberg have suggested that Citi, Goldman Sachs, Morgan Stanley and HSBC have been appointed to advise on Saudi Arabia’s global borrowing program. This involves the refinancing and extension of the $10 billion loan from two years ago, and a new bond which could rival the record-breaking $17.5 billion issue of 2017.
The Saudi stock exchange opened itself to direct investment by foreign institutions in mid-2015 and last year eased restrictions on foreign ownership in its stock market to improve the investment environment.
International firms such as BlackRock, Citigroup, HSBC and Ashmore Group have since been among those to join the list of institutional investors that can directly trade the market.