May 8, 2019 / 1:11 PM / 12 days ago

Australia's Macquarie Capital downsizes in the Gulf -sources

ABU DHABI/SYDNEY, May 8 (Reuters) - Macquarie is scaling back in the Middle East by downsizing its operations in the United Arab Emirates, three sources familiar with the matter said and is giving up an operating licence in Saudi Arabia.

Saudi Arabia’s Capital Market Authority said on Tuesday that Macquarie Capital, the lender’s investment banking unit, had relinquished its operating licence in the country, which it had acquired in 2017.

“Macquarie Capital Saudi Arabia LLC has requested the Capital Market Authority to cancel its authorization to conduct arranging and advising activities,” the regulator said in a statement. “The company has not commenced business yet.”

In the UAE, the Australian bank is downsizing its operations in Abu Dhabi, sources familiar with the matter told Reuters.

The sources said Wissam Moukahal, executive chairman at Macquarie Capital, Abu Dhabi, had left the company.

Macquarie did not immediately return requests for comment.

“It is a tough business environment in investment banking and banking in general, with few deals coming the bank’s way,” one source aware of the matter said. “It is also part of the bank’s strategy of remodelling its business.”

Moukahal left after five years with Macquarie Capital, which was one of the first banks in Abu Dhabi Global Market, the country’s financial centre.

Some out of around 20 staff at Macquarie Capital are serving their notice period, the source said without being more specific. They were offered positions in Macquarie’s offices elsewhere, one of the sources said.

Macquarie had been one of several foreign banks and funds that moved to expand in Saudi Arabia after Crown Prince Mohammed bin Salman announced an economic vision plan for 2030 to diversify the kingdom’s oil-dependent economy.

But many of the deals expected to materialise from this plan have been delayed including the Aramco initial public offering, which is now slated for 2021.

“We’ve decided there were better opportunities elsewhere,” a person familiar with the situation told Reuters.

Saudi Arabia has seen only nine IPOs since 2016, which have raised $1.3 billion, according to Refinitiv data, with most arranged by Saudi banks.

JPMorgan, Bank of America Merrill Lynch, Citigroup and Morgan Stanley, lead in the M&A market in Saudi Arabia, according to Refinitiv data, with $105 billion worth of deals since 2016. (additional reporting by Hadeel Al Sayegh and Saeed Azhar. Editing by Jane Merriman)

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