Bahrain-based Gulf International Bank (GIB) is poised to become the first regional bank to establish a presence in Saudi Arabia. A licence has been issued to GIB by the Saudi Arabian Monetary Agency (SAMA - central bank) for the opening of a branch in Riyadh.

'This is the first licence granted to a non-Saudi bank,' says a senior GIB executive. 'The branch is due to be opened in about six months.' He adds that premises have been hired and preparations for the branch opening are well advanced. The potential for disturbance caused by the Y2K millennium bug problem may lead GIB to delay the full opening of the branch until early next year.

GIB will initially concentrate on corporate banking activities from its Saudi operation, and there are no plans to develop a retail business, the executive says. The recently-completed merger with London-based Saudi International Bank (SIB) was integral to the expansion of its operations (MEED 7:5:99). 'SIB already had a strong customer base in Saudi Arabia,' says the GIB official. 'We are looking to grow on this customer base, using our well-established reputation throughout the Gulf...SIB complimented our operations.'

He adds that there are plans for the expansion of GIB's presence in Saudi Arabia and that within 12-18 months a further two or three branches are likely to be opened outside of Riyadh. However, a fresh licence for each branch will be required from SAMA.