Saudi Arabia: Standard eyes ABN Amro stake in Saudi
The Saudi Arabian banking sector is waking up from its regulation-induced slumber.
Since the restriction of banking licences to 10 banks has been lifted, and foreign banks are no longer limited to minority shareholdings, international banks have responded by turning their attention to the Gulf state.
The latest foreign bank that could enter the market is Standard Chartered, which is rumoured to be in talks with ABN Amro about acquiring its 40% stake in Saudi Hollandi Bank. The Saudi institution is the smallest of the 10 listed banks in the kingdom. Any deal could cost Standard Chartered just over $1 billion, based on Saudi Hollandi’s share price. Both ABN Amro and Standard Chartered declined to comment.
If Standard Chartered succeeds in its bid, it will join a small number of foreign banks already operating in the country. Bahrain-based Gulf International Bank was the first to be granted a licence in 2001. Last year Deutsche Bank became the first foreign bank to obtain a licence for a 100% foreign-owned business in the kingdom. Now 10 foreign banks, including BNP Paribas and HSBC, have secured licences for majority-owned operations. HSBC, which already had a presence through a minority holding in British Saudi Bank, has also set up as an independent player.