Citigroup to Target Middle East in 2018

Citigroup is expecting that 2018 would be its best year for investment banking in the Middle East and Africa in at least a decade, according to a senior executive at the U.S. bank.

Citibank is expecting 2018 would be the best year for the company.

Citigroup’s head of investment banking, Miguel Azevedo, stated that Nigeria, Egypt, and the United Arab Emirates would also be main growth drivers as bond sales, mergers, and acquisitions and public share sales pick-up.

“The pipeline in the Middle East and Africa is as good as we have seen since the global financial crisis of 2008,” Azevedo said in an interview, he also added that emerging markets represented a larger weight of Citi’s earnings than for others.

“GDP growth for advanced economies this year is between 2.5 and 3 percent, while for emerging markets it is between 4.5 and 5 percent. For investment banking, the growth should maybe be even more,” stated Azevedo.

In Africa and Middle East, getting deals done would depend on the stability of the market, but the swings in global stocks in recent days represented a correction and were not “enough to put any of these transactions off.”

Last month, the New York-based investment banking stated that it had won a formal approval from Capital Market Authority in Saudi Arabia to start an investment banking business in the state, enabling its return after 13 years of absence.

Some international lenders are looking to build a Saudi presence as opportunities emerge from reforms to wean the economy off a reliance on oil revenues. Those include privatizations such as the planned listing up to 5 percent of Saudi Aramco.

According to some sources, Citi was invited to pitch for a role in the stock market listing and the company has alredy hired Majed al-Hassoun, the former Saudi Fransi Capital executive, to head its investment banking business in Saudi.

“There is a very significant privatization push ... this could create the opportunity for investors to deploy capital to develop the industrial base and infrastructure,” said Azevedo.

He also added that the bank is expecting significant opportunities in Nigeria, which has low debt levels and was expected to return to the bond markets this year, while companies in Nigeria were forecast to issue bonds and launch initial public offerings.

In November, Nigeria issued a $3 billion two-part international bond, a deal managed by both Citigroup and Standard Chartered.

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