RBS stake in Saudi Hollandi may be sold to public
Riyadh, May 18, 2010
A stake in Saudi Hollandi Bank held by a consortium led by Royal Bank of Scotland (RBS) could be sold through a public share offering, the chairman of the Saudi lender said on Tuesday.
'We are studying many options. Either we find a long-term strategic partner or we reach an agreement with the central bank to find another way to... offer these shares in (a public offering),' Mubarak al-Khafrah told Reuters on the sidelines of a conference.
Saudi Hollandi Bank would only consider international partners, not local counterparts, to replace the consortium, Khafrah said.
'There are many options, but the partnership does not mean a local partnership. We do not need local partnerships,' he said.
Khafrah also said a team at Saudi Hollandi was looking into options for the stake sale.
'The board has created a team to study the various options and to look at international banks as well ... Talks are ongoing, and hopefully the result will be out by the end of the third quarter,' he said.
Separately, Khafrah said the Saudi authorities should help to boost lending by placing long-term deposits with banks in the world's largest oil exporter.
Profits at most Saudi banks declined during the first quarter, due mainly to a decline in lending income.
'Several local banks have become more cautious towards lending, and one key reason for this is that most of the lending demand is for long maturities, while most deposits held by Saudi banks are short-term deposits,' he said.
Saudi Hollandi Bank posted a 19 per cent drop in net profit during the first quarter after a decline in both its lending income and loan portfolio.
Earlier on Tuesday, Saudi Arabia's central bank governor said Saudi banks should be able to resume 'normal business' in 2010.-Reuters