StanChart planning to acquire RBS's 40 per cent stake in Saudi bank: report
08 March 2008
Mumbai: Standard Chartered Bank is planning to acquire a 40 per cent stake in Saudi Hollandi Bank from Royal Bank of Scotland to secure a presence in the world's largest oil exporter, reports said.
The acquisition is expected to cost 5.72 billion riyals ($1.53 billion) at Saudi Hollandi's latest closing price of 54 riyals, the Middle East Economic Digest (MEED), said in its report.
Saudi authorities had rejected Standard Chartered's application for a full banking licence and hence the acquisition moves. "Saudi Hollandi as an option," the report said.
"Standard Chartered wants its own brand in Saudi Arabia, but (the central bank) is reluctant to award any more commercial banking licenses," the magazine quoted a source as saying.
RBS, sources said, was "prepared to accept whichever bidder" the Saudi central bank recommended in order to achieve a quick sale, the magazine reported.
RBS, which took control of the Hollandi stake when it acquired Dutch bank ABN Amro last year, had said in its offer letter for ABN that the Saudi assets would be sold.
The Saudi government is opening up financial services to competition after forcing foreign lenders to give up majority stakes in their operations in the 1970s.