Emirates NBD eyes RBS stake in Saudi affiliate

"We are interested in the stake," Dubai-based Emirates NBD Chief Executive Officer Rick Pudner told Reuters on Sunday. "It's obviously an interesting possibility to expand in the kingdom."

RBS owns 40 per cent of Saudi Hollandi, a stake worth about $1.72 billion. Pudner said there were no talks taking place.

"In terms of retail franchise, it's an exciting market because of the wealth and the number of people," Pudner said.

Emirates NBD also plans to start an investment bank in the kingdom by the end of the year after it obtained a licence from the capital markets authority in 2007, Chief Financial Officer Sanjay Uppal told Reuters. It already has one branch in Riyadh.

Emirates Investment Services KSA will offer brokerage, asset management and corporate advisory services, Uppal said.

"Saudi Arabia is growing as a hub for the investment banking business," he added.

RBS took control of the Saudi Hollandi stake when it bought Dutch bank ABN Amro last year, saying in its offer letter that it would sell the Saudi assets.

National Bank of Kuwait and Standard Chartered Plc were competing for the stake, the Kuwaiti lenders Chief Executive Officer Ibrahim Dabdoub told Reuters in 2006.

Lebanon's Banque Audi was a third contender, sources familiar with the matter told Reuters last year.

London-based Middle East Economic Digest (MEED) reported in March that Standard Chartered was still interested in the Saudi Hollandi stake after it failed to secure its own banking licence.

Shares of Saudi Hollandi are down 2.8 per cent this year to Saturday's close, outperforming the benchmark, which is down more than 12 per cent. 

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