One source close to Hollandi says although some international banks have expressed an interest, no firm talks are under way for the stake to be sold. He says another option being considered is for the stake to be floated on the Saudi stock market (Tadawul).

The source says both options are still being evaluated, and as yet there is no clear outcome. "Where the process is at the moment means it could be either outcome," says the source.

If no progress has been made on the issue by June, it is unlikely that any significant progress on the sale will made until late 2008 or early 2009.

The source says the regional slowdown during the summer months, followed by Ramadan and Eid, means any talks or decision-making will not be able to resume until November.

This could put the sale into its fourth year of gestation.

Investment bank ABN Amro decided to sell its the stake in Hollandi about three years ago and several parties, including National Bank of Kuwait and Standard Chartered Bank, have expressed an interest in acquiring the shares to give them a foothold in the Saudi banking market.

The process was interrupted through the acquisition of ABN Amro by a consortium of Royal Bank of Scotland (RBS), Santander and Fortis for Eur72bn ($115bn) in October 2007, which led to speculation that one of the three institutions could keep the stake for its own entry into Saudi Arabia.

But it is understood that none of the three firms have expressed an interest in retaining the stake.

RBS says no decision has yet been taken on whether to sell its interests in Hollandi, although with the bank's impending $24bn rights issue, analysts say it is eager to increase its cash levels following the expensive ABN acquisition and the write-down of $8.3bn in 2007.

If the stake is sold off, the Saudi Arabian Monetary Agency (Sama), the central bank, is understood to favour selling it to an international bank rather than another Saudi bank, or even a regional bank looking to enter the Saudi market (MEED 7:3:08).

In preparation for the sale, an agreement that effectively gave ABN Amro management control was allowed to expire in December 2007.

This prompted the appointment of Geoff Calvert as managing director in August that year, and the shift towards ensuring all staff are locally employed by Saudi Hollandi.

In March, Standard Chartered Bank entered the race to buy Saudi Hollandi after being told by the central bank it would not be issued with its own full licence.

Sama will play a critical role in deciding which bank gains control of Saudi Hollandi, as it has to approve any takeover deal.

A Saudi-based source says RBS is prepared to accept whichever bidder Sama recommends in order to achieve a quick sale.