March 1, 2018 / 5:21 AM / 4 months ago

Bank of New York Mellon Corp plans to set up Saudi office: sources

DUBAI (Reuters) - Bank of New York Mellon Corp (BK.N) plans to establish an office in Saudi Arabia as early as the second quarter as it looks for opportunities to service the kingdom’s overseas assets, say sources familiar with the matter.

FILE PHOTO: The Bank of New York Mellon Corp. building at 1 Wall St. is seen in New York's financial district in New York, U.S. March 11, 2015. REUTERS/Brendan McDermid/File Photo

The bank, which is aiming to apply for an asset services license from the Capital Market Authority, according to the sources, is the latest foreign bank aiming to bolster its presence in the kingdom as it embarks on a huge reform push.

BNY Mellon already handles overseas funds held by Saudi government-linked entities from outside the kingdom but opening an office in Riyadh will enable it to work more closely with its clients and solicit new business, the sources said.

“BNY Mellon has been exploring opportunities and the possibility of establishing a presence in the Kingdom of Saudi Arabia for some time.  These plans are still in development stage. Accordingly, we are not in a position to discuss our future plans at this time,” the bank said in a statement to Reuters. 

The bank sees opportunities to provide depositary and trustee services to large Saudi entities with overseas business such as Saudi Aramco, Public Investment Fund (PIF) and others, the sources said.

Aramco is embarking on what is expected to be the world’s largest initial public offering, due to go ahead in the second half of 2018, a centerpiece of an ambitious plan to reduce the dependence of the Saudi economy on oil.

PIF, the country’s main sovereign wealth fund, is planning to ramp up its overseas investments to obtain technology for Saudi industry and boost returns on Saudi Arabia’s financial reserves

Initially, the bank will have an office with around 5 staff, the sources said.

BNY Mellon, which has been operating in the Middle East for nearly 100 years, currently has offices in four countries in the region: United Arab Emirates, Lebanon and Turkey, according to its website.

It manages the money of large institutional investors and provides depositary and trustee services to issuers of debt and equity in international capital markets, as well as payment and trade services to local commercial banks, the website says.

Reporting By Tom Arnold; Editing by Shri Navaratnam

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