MANAMA/RIYADH, (Reuters) – The chief executive of NCB Capital, the investment arm of Saudi Arabia’s biggest bank by assets, will leave the lender, four banking sources told Reuters.
Ahmed Farid will be replaced by Jawdat al-Halabi, head of investment services at NCB Capital, the investment company of state-owned National Commercial Bank (NCB), two sources close to the bank said.
Farid’s departure came after a planned joint venture of NCB Capital with U.S. bank Goldman Sachs did not work out as initially envisaged, according to bankers.
In 2007, Goldman Sachs and NCB Capital agreed to jointly offer investment banking services in Saudi Arabia, allowing the U.S. bank to enter the Middle East’s largest banking market and the world’s top oil exporter.
Part of the deal was an option for Goldman Sachs to buy an equity stake in NCB Capital but so far the joint venture has not been formally established, according to bankers.
A spokesman for parent bank NCB declined to comment, while Ghassan Hussein Badkook, manager at NCB’s corporate relations department, could not be reached.
One source said Farid’s planned departure was linked to the failed Goldman Sachs deal but several others said this was not the case as NCB wanted to make a start with a new boss overseeing future expansion.
“The decision was mutual on both sides,” one source close to NCB said.
NCB has been trying to tap rising interest by foreign banks and investors in the biggest Arab economy which is gradually opening up its stock market, the Gulf’s best performing bourse this year.
NCB’s net profit almost doubled last year despite a slowdown in lending, but its fourth quarter profit appears to have fallen to the lowest in a year.
It made a net profit of 4.04 billion riyals ($1.08 billion) in 2009, up from 2.03 billion riyals in 2008.
NCB, which is slated for privatisation, did not give profit figures for the fourth quarter, which based on the annual and previous figures Reuters calculated to be about 770 million riyals, compared to a loss of 2.55 billion riyals a year earlier.