RIYADH (Reuters) – Morgan Stanley, a U.S. investment bank keen to expand in the Middle East, signed a deal on Friday to form a joint venture with Saudi securities firm Capital Group.
Officials said at the signing that the U.S. bank would hold a stake of about 50 percent in Morgan Stanley Saudi Arabia. They did not give the value of the deal, pending regulatory approval.
The Riyadh-based Capital Group, founded by Fahad Almubarak in 2001, holds Saudi licenses to offer advisory, banking, asset management and trading, officials said earlier.
“We are still working in the terms of size, but it would be quite sizeable. Morgan Stanley will have a controlling interest,” Almubarak told reporters, adding that new bank’s activities would include brokerage, financing, and fund management.
The bank will initially employ 25 professional and open branches in Riyadh, Khobar and Jeddah.
“What is happening in Saudi Arabia and the Gulf is very important to our firm. We want to find talent in these markets … people who can help in international banking … and be an integral part of the local market,” John Mack, Morgan’s chief executive, told reporters.
Wall Street firms have been expanding overseas, eager to secure new private and corporate clients in fast growing markets. Morgan Stanley in particular targeted the Middle East, where years of high energy prices have generated enormous wealth and stimulated local economies.
Morgan opened its first office in the region in Dubai last year and has also secured a banking license in Qatar.