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MarketScreener Homepage  >  Equities  >  Saudi Arabian Stock Exchange  >  Banque Saudi Fransi    1050   SA0007879782

BANQUE SAUDI FRANSI

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France's Credit Agricole to sell Saudi bank stake to Prince Alwaleed's firm

09/12/2017 | 05:01am EST
A logo is pictured on a Credit Agricole bank branch in Paris

DUBAI/PARIS (Reuters) - France's Credit Agricole (>> Crédit Agricole) has agreed to sell about half its 31.1 percent stake in Banque Saudi Fransi (BSF) (>> Banque Saudi Fransi SJSC) to billionaire Prince Alwaleed Bin Talal's Kingdom Holding (>> Kingdom Holding Company) for 5.76 billion riyals (1.16 billion pounds).

DUBAI/PARIS (Reuters) - France's Credit Agricole (>> Crédit Agricole) has agreed to sell about half its 31.1 percent stake in Banque Saudi Fransi (BSF) (>> Banque Saudi Fransi SJSC) to billionaire Prince Alwaleed Bin Talal's Kingdom Holding (>> Kingdom Holding Company) for 5.76 billion riyals (1.16 billion pounds).

The sale was part of a wider review of Credit Agricole's assets and markets to meet new banking rules and tougher economic conditions. Sources had said in March it picked JPMorgan (>> JP Morgan Chase & Company) to advise on a potential sale.

"We see it as positive but expected as it is part of management plan to clean up capital and overseas operations," brokerage house Jeffries' analysts said in a note.

BSF said after the deal was announced that Kingdom Holding would own 16.2 percent of the bank and Credit Agricole would retain 14.9 percent. It said Credit Agricole could sell a further 5 percent stake via off-market block trade deals.

“With Alwaleed becoming a majority owner of the bank, it is a sound long term strategic move which will ultimately benefit BSF," Hesham Abou Jamee, chief executive of Alisthmar Capital, told Saudi-owned Al Arabiya TV.

Credit Agricole follows Royal Bank of Scotland (RBS) (>> Royal Bank of Scotland Group) in seeking to sell its stake in a Saudi bank. RBS holds 40 percent of Alawwal Bank (>> Alawwal Bank), which is talks to merge with Saudi British Bank (>> Saudi British Bank SJSC), partly owned by HSBC (>> HSBC Holdings).

Credit Agricole said the sale of a 16.2 percent stake in BSF would lift its fully-loaded common equity tier 1 (CET1) ratio for Crédit Agricole S.A. by about 20 basis points and its fully-loaded CET1 ratio of Crédit Agricole Group by 5 basis points.

The transaction, subject to regulatory approvals, is expected to close in the second half of this year and will be funded through Kingdom Holding's available liquidity and existing bank facilities, Kingdom said in a statement.

Kingdom Holding shares rose 7.6 percent to 11.06 riyals, while Banque Saudi Fransi shares were down 2.7 percent at 32.10 riyals, after closing at 33 riyals on Monday.

At a deal price of 29.5 riyals per share, Kingdom Holding is buying the BSF stake at a discount to its current share price and book value of Saudi bank peers.

"It is not a very expensive acquisition," said an analyst at a Gulf brokerage. "For Kingdom Holding, it is a really good deal. It is a clean bank and was quite conservative. Credit Agricole could have realized more but in this environment they got a buyer."

The acquisition is expected to increase cash flow and income for Kingdom Holding. Credit Agricole remains a strategic shareholder and will support the bank's activities, Kingdom Holding said.

(Additional reporting by Blandine Henault in Paris, and Saeed Azhar and Celine Aswad in Dubai; Editing by Edmund Blair)

By Hadeel Al Sayegh and Sudip Kar-Gupta


© Reuters 2017
Stocks mentioned in the article
ChangeLast1st jan.
BANQUE SAUDI FRANSI 1.19% 34.1 End-of-day quote.7.91%
CRÉDIT AGRICOLE SA -2.35% 10.175 Real-time Quote.-1.41%
HSBC HOLDINGS PLC -1.21% 403.25 Delayed Quote.6.44%
JPMORGAN CHASE & CO. -1.79% 138.64 Delayed Quote.11.10%
KINGDOM HOLDING COMPANY -0.26% 7.8 End-of-day quote.-1.89%
LETS HOLDINGS GROUP CO., LTD. 1.58% 7.72 End-of-day quote.-0.77%
LOOK HOLDINGS INCORPORATED -1.07% 921 End-of-day quote.-3.76%
NATWEST GROUP PLC -1.55% 158.55 Delayed Quote.-5.43%
THE SAUDI BRITISH BANK 0.20% 25.45 End-of-day quote.2.95%
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Financials
Sales 2020 7 033 M 1 875 M 1 875 M
Net income 2020 2 028 M 541 M 541 M
Net Debt 2020 - - -
P/E ratio 2020 18,7x
Yield 2020 1,77%
Capitalization 40 896 M 10 900 M 10 902 M
Capi. / Sales 2020 5,81x
Capi. / Sales 2021 5,70x
Nbr of Employees 2 883
Free-Float 55,5%
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Mean consensus UNDERPERFORM
Number of Analysts 11
Average target price 28,74 SAR
Last Close Price 34,10 SAR
Spread / Highest target 8,50%
Spread / Average Target -15,7%
Spread / Lowest Target -41,3%
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Managers and Directors
NameTitle
Rayan bin Mohammed Fayez Chief Executive Officer & Managing Director
Mazen Abdul Razak Sulaiman Al-Romaih Chairman
Thamer M. Yousef Chief Operating Officer & Head-Information Systems
Abdullah Ali Al Khalifa Chief Financial Officer
Khalid Hamed Hamed Al-Mutabagani Independent Director
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