Gulf ambitions: A pedestrian walks past a row of ATMs outside a Barclays branch in London. The bank continues working on investment banking deals in Saudi Arabia. — AFP
LONDON: Barclays Plc is re-entering Saudi Arabia, becoming the latest bank to beef up operations in the oil-rich kingdom that’s in the midst of a trillion-dollar economic transformation plan.
The London-based lender is in the process of securing a licence to conduct investment banking activities in the country, and plans to open an office in Riyadh next year as part of that push.
“We are establishing our regional headquarters, we are in the process of getting all the appropriate banking and other licences,” chief executive officer (CEO) C S Venkatakrishnan said in an interview on Bloomberg TV from Riyadh, where he’s attending the kingdom’s flagship annual Future Investment Initiative summit.
“The office will be in the financial district and we’re getting enough to have a good sized office,” he said. “We will build it up as we get the licences.”
The move to re-enter Saudi Arabia comes more than a decade after Barclays pulled out of the country under then CEO Antony Jenkins, who sought to rein in the global ambitions of the company’s investment bank in the aftermath of the financial crisis.
Barclays Saudi Arabia cancelled its licence to conduct securities business in 2014 as international lenders struggled to compete with local rivals, Bloomberg News reported at the time.
About 12 years on, Barclays and many of its peers have been lured back to the kingdom as it prepares to pour billions more into areas like artificial intelligence, gaming and high-tech manufacturing and races to diversify its oil-reliant economy.
“We are there to provide the connection with the rest of the world, bring in direct investment and liquidity,” Venkatakrishnan said. Investment flows used to head out of the region into Europe and the US, and “now there’s a lot coming back,” he added. “I think that’s the part where we can help.”
For now, the bank has hired Mohammed Abdulaziz AlSarhan, the chairman of local shipping and logistics company Bahri, to help lead the effort, according to a person familiar with the matter. Barclays declined to comment on the appointment.
With its regional headquarters licence in Saudi Arabia, Barclays is following in the footsteps of JPMorgan Chase & Co and Goldman Sachs Group Inc.
Authorities in the kingdom have been putting pressure on international firms to establish their Middle Eastern headquarters in Riyadh, warning companies would risk losing business with state entities if they didn’t comply.
While the new effort will re-establish its physical presence in Saudi Arabia, Barclays has continued working on investment banking deals in the kingdom.
Most recently, it advised the country’s sovereign wealth fund on its debut green bond.
The bank this year elevated two senior leaders, Khaled El Dabag and Walid Mezher, to oversee its growing business in the Middle East. The two continue to be based in Dubai but now report to Stephen Dainton, head of investment bank management.
With the move, Barclays effectively put the Middle East on par with its other main regions around the world, which already have local CEOs that report to Dainton. — Bloomberg
