Dubai-based Mashreqbank has agreed to pay $40mn to the New York financial authorities and to take a range of remedial measures related to compliance issues at its New York branch. The issues relate to Bank Secrecy Act and Anti Money Laundering issues.
Citigroup Receives Investment Banking License in Saudi Arabia
The Saudi Capital Market Authority (CMA) issued a statement on 25 April saying that it had authorised Citigroup Saudi Arabia to "conduct dealings as underwriters arranging and advising on securities business activities."
This is commonly known as an 'investment banking license' and it does not allow the bank to raise deposits in the Kingdom.
Carmen Haddad is the Chief Executive of Citigroup Saudi Arabia. She is currently Citi's senior private banker in the GCC, Egypt and the Levant, and is serving as interim chief executive in Qatar pending the appointment of a permanent replacement.
Citi has had a leading role in all three of the Saudi Government's recent fund raising initiatives: a $10bn loan raised in April 2016, a $17.5bn bond issue in October 2016 and a $9bn sukuk issued in mid April 2017.
Citibank first establshed a physical presence in Saudi Arabia in 1955 with a branch in Jeddah. It opened a branch in Riyadh in 1966. In 1980, as a result of new banking legislation in the Kingdom, Citi converted its Saudi banking operations into a joint venture - Saudi American Bank (Samba). Citi held the maximum 40% permitted to foreign owners and had a management agreement to run the bank. Citi reduced its stake to 30% in 1991, and was diluted to 23% in 1999 when Samba merged with United Saudi Commercial Bank. In 2004, Citi controversially sold its remaining stake, which at that point stood at 20%.
It has been widely reported that Citi has made several attempts to re-establish a physical presence in the Kingdom.
There are 12 locally incorporated commercial banks in Saudi Arabia, with the most recent new license being issued in 2008 to Alinma Bank. Twelve foreign banks have branch licenses. The banks and the branches are licensed and regulated by the Saudi Arabian Monetary Authority (SAMA), not the Capital Market Authority.
Investment banking licenses are quite commonly issued, with many foreign firms being active in Saudi Arabia. In contrast, branch licenses are hard to obtain and SAMA takes a strategic approach to when granting them. The 12 foreign bank branches are:
Gulf International Bank (Bahrain, wholesale bank)
National Bank of Bahrain (Bahrain, retail bank)
Emirates NBD (Dubai-UAE)
National Bank of Kuwait
Bank Muscat (Oman)
National Bank of Pakistan
State Bank of India
TC Ziraat Bankasi (Turkey)
Several of the domestically incorporated Saudi banks have foreign banks as shareholders:
Saudi British Bank (HSBC 40%)
Albank AlSaudi AlFransi (Credit Agricle Corporate and Investment Bank 31.1%)
Arab National Bank (Arab Bank of Jordan 40%)
Alawwal Bank (formerly Saudi Hollandi Bank - ABN Amro 40%)
Bank Al-Jazira (National Bank of Pakistan - 5.8%)
Saudi Investment Bank (JP Morgan International Finance Ltd - 7.5%. Saudi Ojeh, a local company tied to the Lebanese Harriri family has 5.8%)
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