Emirates NBD eyes stake in Saudi bank

DUBAI — Emirates NBD, the largest bank in the Middle East, yesterday said it would be interested in acquiring a 40 per cent stake in Saudi Hollandi Bank (SHB) from a European consortium "when and if" it comes up for sale.

By Issac John (Deputy Business Editor)

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Published: Mon 26 May 2008, 9:33 AM

Last updated: Sun 5 Apr 2015, 1:42 PM

The 40 per cent stake, originally owned by ABN Amro, now belongs to a consortium led by the Royal Bank of Scotland (RBS) following the titanic $11.7 billion acquisition of the Dutch lender in 2007.

Speaking to Khaleej Times, Kevin Flannery, General Manager, International of Emirates NBD, said the Dubai-based bank would be keen to bid for the stakes "when and if" it is up for sale. "However, to the best of my knowledge, the European consortium has not yet initiated the sale proceedings. Like other banks, we will be interested in the stake as it would provide us with a strong platform to expand in the kingdom."

"We are interested in the stake," Emirates NBD Chief Executive Officer Rick Pudner was also quoted by Reuters yesterday. "It's obviously an interesting possibility to expand in the kingdom." The estimated value of the 40 per cent stake is about $1.72 billion.

The RBS consortium, which also comprises Belgian-Dutch group Fortis and Spain's Banco Santander, acquired ABN Amro last year following a six-month takeover battle, with the deal representing the biggest-ever acquisition in the history of the European banking sector.

Recently, Mubarak Al Khafra, SHB’s newly appointed chairman, said the Saudi Arabian Monetary Authority was considering the sale of the stake either to the public via the stock market or to accept bids made by "local banks and firms."

Saudi Hollandi reported net profit of SR282.4 million, a 31 per cent year-on-year increase in the first quarter 2008. Operating profit rose by 18 per cent to SR311.6 million on the back of a strong performance of both the bank's credit and investment portfolio.

Standard Chartered Plc is also reportedly mulling to bid for the stake in Saudi Hollandi bank and is also eyeing Banque du Caire S.A.E. to expand its reach in the Middle East .National Bank of Kuwait has also said that it was competing with Standard Chartered Plc to acquire ABN's stake in Hollandi. Sources familiar with the matter have said that Lebanon's Banque Audi was also interested.

Saudi Hollandi Bank, the oldest in the kingdom, was founded in 1926 and is one of the leading banks in Saudi Arabia. The Dutch Bank ABN Amro owns 40 per cent of the stock with the remainder being held by Saudi investors.

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