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Credit Suisse, Calyon and Nomura join race for Saudi business
9 May 2008
More international banks have flocked to Saudi Arabia and are looking to beef up their teams to gain a chunk of the local market.
Nomura became the first Asian bank to be granted a licence to operate in the region this week, hot on the heels of Credit Suisse and French investment bank, Calyon. BNP Paribas, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan and Morgan Stanley are already there.
It’s no surprise that they want to gain a presence on the ground – Riyadh-based investment bank Jadwa Investment has tipped oil revenues to increase by 30% in 2008, while Saudi equity capital market deals have reached $3.3bn so far this year, or 82% of total Gulf activity, according to Financial News.
Bill Allum, managing director of search firm Napier Scott, reckons most international banks will transfer someone to head up the Saudi operation, and then generally look to recruit expats for senior posts as they build up the team on the ground.
Pay is generous, particularly at international houses. “Global banks adopt a policy of looking for the best and paying a premium to get them into the kingdom,” says Allum. “In the current market, regional banks think they can offer 40% less than the typical London salary because it’s tax free. This doesn’t fly with the really good people.”
To side-step the thorny issue of localisation in Saudi, and gain a foothold in the market, international banks are teaming up with regional banks. Morgan Stanley has a joint venture with The Capital Group, and Credit Suisse has one with Saudi Swiss Securities.
Peter Jones, director of recruiters MRK International, says joint ventures typically bring local candidates through the doors of the regional bank and transfer them across to the talent management programmes of the partner global bank.
Jones says salaries for investment bankers “vary wildly.” Mid-level posts can pay $200k base, with bonus potential currently greater than in Western markets and any other Gulf nation.
