In a statement, the Europe, Middle East and Africa head of Citigroup said, the bank is planning to hire more bankers in Saudi Arabia for its direct custody business. The development comes in the wake of Citigroup adding more than 20 bankers for onshore capital markets in the last 24 months.
The development marks Citigroup’s return to the Middle East after a hiatus of 13 years.
In 2019, it was granted a capital markets license following which it said it would expand its direct custody and clearing services in the Kingdom.
On Thursday, David Livingstone disclosed, Citi’s head of Europe, Middle East and Africa told a conference that while there was no set time-table for the lender to obtain a full banking licence in Saudi Arabia, the outlook for financial sector activity is positive.
“That is something we want to participate very strongly in,” said Livingstone. “Recently we secured our direct custody and services license and we will be growing that business.”
Incidentally, Citigroup was among the banks that advised Saudi Aramco on its record $29.4 billion initial public offering (IPO) in 2019. Earlier this year in April, it had advised the Saudi government on a $7 billion three-tranche bond sale.
When asked whether Citigroup is more cautious about lending to Middle East producers given lower oil prices, he said “on balance, no”.
Incidentally, Brent crude LCOc1 is trading at around $42 a barrel, and is till far away from the $60 a barrel at the start of the year, before the Wuhan coronavirus pandemic crimped demand.
Given the low cost base of many Middle Eastern producers, they have greater resilience to withstand “lower for longer” oil prices than those in some other parts of the world, said Livingstone.