Details of the price obtained by Citigroup for its 16 million shares were not disclosed but market sources say that PIF paid about SR 9,375 million ($2,500 million) for the block, or about SR 585 ($156) a share, which represents about a 25 per cent premium to the market value. Samba's share price slipped from SR 470 ($125) to SR 440 ($117) on the day the transaction was announced, but has subsequently recovered. It closed on 2 June at SR 465 ($124).

Citigroup has announced that it made a $760 million gain on the transaction. Its position was the legacy of the formation of Samba in 1980, and the dilution of its original minority stake that came through the merger of Samba with United Saudi Bank in 1998. Speculation about Citigroup's plans in the Gulf have been rife since the non-renewal of the Samba management agreement, the withdrawal - later reversed - of all its assets from Bahrain ahead of the war in Iraq and the sale of its personal loan portfolio in Oman to Bank Muscatin December 2003.

However, Citigroup has pledged continued commitment to both the kingdom and the region. It is understood to be actively pursuing the first foreign banking licence to be issued in Kuwait. Its Saudi clients will be served - as many already are - out of the group's Dubai office. The Samba shareholding has long been an anomaly in the Citigroup business, as the only foreign institution in which it held a non-controlling stake. The capital markets law (CML), due to be implemented imminently, will also offer the opportunity for international banks to establish independent investment banking operations (Saudi Banking, MEED Special Report, 14:5:04, pages 36-38).