Credit Agricole SA considering sale of Saudi Fransi stake

Bloomberg

Thu, Mar 09, 2017 - Page 10

Credit Agricole SA, France’s third-largest bank by market value, is considering a sale of its 31 percent stake in Saudi Arabian lender Banque Saudi Fransi, in a deal that could potentially fetch about US$2.4 billion, people familiar with the matter said.

The bank is speaking to advisers to find buyers, the people said, asking not to be identified as the information is private.

The stake might attract both international and regional lenders that are seeking an entry into the kingdom, one person said.

A formal process has not started and the bank might still decide against the sale, the people said.

Credit Agricole and Riyadh-based Banque Saudi Fransi representatives declined to comment.

Credit Agricole has been cutting costs and refocusing on its main markets to propel growth.

CEO Philippe Brassac last year completed a US$19.6 billion deal to sell holdings in more than three dozen regional lenders, simplifying the structure and raising capital buffers.

Barclays PLC last year agreed to sell its Egyptian business to Morocco’s Attijariwafa Bank, while Royal Bank of Scotland Group PLC is working with Credit Suisse Group AG to sell its 40 percent stake in Saudi Arabia’s Alawwal Bank, Reuters reported in November last year.

Banque Saudi Fransi’s 29 billion riyal (US$7.7 billion) market value makes it the nation’s fifth-largest bank, data compiled by Bloomberg showed.

The company, which has assets of 203 billion riyals, reported fourth-quarter profit that slumped 61 percent due to higher impairments for credit losses.

The shares have fallen 7.4 percent this year and closed at 24.1 riyals on Tuesday.