Citigroup eyes banking license in Saudi Arabia

Citigroup has its eyes on acquiring a banking license in Saudi Arabia as part of efforts to further boost its business in the kingdom by foraying into trade finance and treasury solutions. This was revealed in a statement credited to a senior executive at the bank.

Citi recently acquired a Saudi capital markets licence in 2017. This license made it possible for the lender to reenter the kingdom after a 13-year long hiatus.

As one of its first major deals upon returning, Citi served as advisor to Saudi Aramco on its US$29.4 billion listing in 2019. This deal held the record of the world’s biggest initial public offering. The lender later went on to advise on several other sovereign and corporate bond deals.

“We have seen significant growth during this time and we’re still very interested in making further investments locally in the market,” Ebru Pakcan, Citi’s head of EMEA emerging markets business, told Reuters in a quick interview conducted on the sidelines of Saudi Arabia’s FII investment conference.

“As our clients make more investments across multiple growth potential sectors, we are interested in expanding our capabilities and services locally over time by pursuing a banking license.”

The core target clients of Citi’s business model multinational with global reach and scale of operations. It also leverages opportunities to source and introduce investment openings in local markets to global investors.

“When we work with those global corporates, especially in cash management and trade finance and other treasury solutions, actually being a deposit taking institution with local payments and collections capabilities becomes important,” she said.

Banks from the West have been taking every opportunity for expansion in Saudi Arabia following an announcement by the government of its plans to privatize state assets and other reforms undertaken as part of its economic strategy to cut dependence on oil.