BNP Paribas acquires 25% stake in Saudi Investment Bank

France's BNP Paribas has bought a 25 per cent stake in the investment arm of Saudi Investment Bank, officials said yesterday, as interest in the Gulf economies grows.

News of the stake comes less than a week after Saudi Arabia, the largest Gulf Arab state and the world's largest energy exporter, relaxed rules on foreigners buying Saudi stock, a move expected to attract investors.

Bankers say the new rules and other reforms in Saudi Arabia, which boasts the largest equity market in the Arab world but one overwhelmingly dominated by local retail investors, will help fuel growth in the Gulf finance sector.

BNP Paribas will buy the stake in Saib Asset Management Company, which will change its name to Saib BNP Paribas for Asset Management, the Saudi Capital Market Authority (CMA) said in a statement posted on its website.

Saib invests 35 per cent of its assets in Saudi Arabia, 34 per cent in the UAE, 18 per cent in Kuwait, eight per cent in Qatar and four per cent in Bahrain, Managing Director Saud Saleh Al Saleh said in remarks published last month.

Swiss UBS said last month it would start an investment and corporate banking affiliate in Saudi Arabia after it teamed up with local Development and Management House for Investments Co.

After the transaction, Saudi Investment Bank will keep a 55 per cent stake in Saib BNP Paribas for Asset Management, the Saudi bank said in a separate statement.

Saib Asset Management has obtained a CMA licence to operate in asset management and offer custody and advisory services.

Details of the transaction were not disclosed.

BNP Paribas declined to comment and Saudi Investment Bank was not immediately available for comment.

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