Saudi Crown Prince Mohammed bin Salman and Jordan’s King Abdullah II ibn Al Hussein attend the investment conference in Riyadh, Saudi Arabia October 23, 2018.
Officially, Jamie Dimon and Bill Winters are among a long list of senior bankers leading a boycott of Saudi Arabia’s flagship Future Investment Initiative in Riyadh this week, as banks seek to distance themselves from the kingdom following the murder of journalist Jamal Khashoggi.
But in the corridors of the opulent Ritz-Carlton Hotel and adjoining King Abdulaziz International Conference Centre, every major investment bank is present. While the most senior bosses have stayed away, all the banks have sent delegations to show their commitment to Saudi at this time of crisis.
A huge pot of gold on the distant horizon is the reason that many are risking their public reputations by visiting the FII during this time of controversy. The kingdom has embarked on an immense overhaul of its economy, which is expected to lead to dozens of mega deals - and billions in fees for the banks.
Still, there is a wide variation in the size and seniority of delegations sent by the banks. HSBC is by far the biggest, according to a list of attendees seen by IFR, with at least 15 bankers shown as present. Samir Assaf, head of its investment bank, even took part in a panel on the main stage.
Credit Suisse is another bank with a large delegation, with 10 bankers listed as attending. They are led by Jim Amine, the Swiss bank’s investment banking chief. Amine and Assaf are the most senior bankers from the investment banking community to be listed as attending the conference.
PLAYING IT SAFE
Other banks have sent much smaller - and less senior - delegations. Most, including Goldman Sachs, Morgan Stanley, Bank of America Merrill Lynch, Citigroup and Deutsche Bank, have sent delegations of around half a dozen bankers, mainly made up of regional Middle Eastern and local Saudi bankers.
By contrast, JP Morgan is listed as sending just two of its Riyadh-based bankers to the event. The US bank, which has earned more than any other bank in Saudi this year and last, has taken what’s seen as the biggest stand in the wake of the murder, with its CEO Dimon the first major banker to pull out.
Others, however, have an alternative explanation. “It’s the people that made the last dollar out of Saudi that were the first to pull out,” said one New York-based investor who is attending the conference. “Those that still haven’t earned much from the kingdom yet are playing it safe.”
Dimon’s own supposed ambitions to run for US president have also been cited.
Whether the public boycotts have any impact on future business with the kingdom remains to be seen. The state-run oil giant Aramco is in the process of scrambling together up to US$70bn to buy a stake in Saudi petrochemicals maker Sabic. No banks have yet been mandated on fund raising, although JP Morgan is advising.
Some at the conference believe the boycott could hurt banks. “I think JP Morgan has made a mistake,” said one person who is currently working very closely on a multi-billion dollar project with the Saudi government. “This region is full of big egos that will remember any slights, Saudi especially.”
HSBC, in sending a larger delegation, is recognising the importance of Saudi to its business model. The UK bank has amassed US$3.7bn in profits in Saudi Arabia since 2008, according to Refinitiv data, which includes US$3.4bn booked through SABB, a local subsidiary that was formed in 1978.
Other banks are also listed as having small delegations. Barclays has just two bankers on the attendee list, UBS three and BNP Paribas four.
Still, it is unclear how definitive the attendee list is. IFR spotted some senior bankers on a flight from London to Riyadh the day before the conference began who are not listed as attendees at the three-day event, nor have they been seen at the conference.
Indeed, apart from HSBC, all banks are keeping an ultra-low profile. Many bankers are sticking to private meeting rooms away from the media. Others are in Riyadh for meetings but staying away from the conference itself, according to some people at the conference.
