Investment Banking In Saudi Arabia Top Banks Salary Jobs

Investment Banking in Saudi Arabia

Citigroup recently received its license to provide a full range of investment banking, debt and equity capital markets, markets, and securities research capabilities to local and international institutional clients. Likewise, Goldman Sachs is looking into obtaining a Saudi equities license. In addition, Credit Suisse intends to apply for a full banking license, and JPMorgan is adding bankers.

The Top Bulge Investment BanksTop Bulge Investment BanksTop 10 bulge bracket investment banks are - Blackstone, Goldman Sach & co, Morgan Stanley, J.P Morgan Chase & co, Bank of America Merrill Lynch, Credit Suisse, Citi, Deutsche Bank, HSBC, UBS.read more want to set up shops in Saudi Arabia. However, should you consider investment banking in Saudi Arabia? What is the market like? How much would you make as an investment banker in Saudi Arabia? How can you get an entry into the Saudi Arabian market? How can you get an entry into the Saudi Arabian market? This article will let you know all the questions and more.

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Let us have a glance at the sequence: –

Saudi Arabia Investment Banking Market Overview

In Saudi Arabia, the finance market is underdeveloped. So if someone from developed markets works in the Saudi Arabian investmentInvestmentInvestments are typically assets bought at present with the expectation of higher returns in the future. Its consumption is foregone now for benefits that investors can reap from it later.read more market, the chances of making a quick name are pretty easy.At the same time, there is another side to the coin! An under-developed market means huge growth potential. And that means one can expect an influx of huge recruitments in years.Most deals in Saudi Arabia are now IPOs. M&A deals are still in the development stage. However, that is beginning to change. If we look at the future of Saudi Arabian investment banking, there would be huge growth in M&A deals as many companies are starting to consolidate.So, as a job seeker for investment banking jobsInvestment Banking JobsThe entry-level investment banking jobs for graduates mainly belong to categories such as markets, specialist markets, investment management, corporate banking, risk management, structured finance, technology, operations, private wealth management.read more, Saudi Arabia can be a great place to move up the ladder. You will be receiving less resistance in growth since the structure is flatter. If you are good (technically and in sales), you will go to the top of the rung very easily (as Saudi Arabian recruiters often mention that good investment bankers are not easily found in their country).

Investment Banking in Saudi Arabia – Services Offered

As Saudi Arabia is an emerging market, the growth potential is havoc. Thus, investment banks in Saudi Arabia offer various services. Let us have a glance at the top 4 services these banks provide: –

The following are a few firms that stand out as investment banks in Saudi Arabia. Let us have a look at them briefly: –

M&A Advisory: Mergers and AcquisitionsMergers And AcquisitionsMergers and acquisitions (M&A) are collaborations between two or more firms. In a merger, two or more companies functioning at the same level combine to create a new business entity. In an acquisition, a larger organization buys a smaller business entity for expansion.read more are offered by almost all of the investment banks in Saudi Arabia. Since M&A is yet to surge in the investment market, many investment firms want to tap into the opportunities. To ensure that the synergySynergySynergy is a strategy where individuals or entities combine their efforts and resources to accomplish more collectively than they could individually.read more is beneficial to the companies, these investment banks offer M&A advisory at all levels.Private Placements: Private placements are among the top five services investment banks in Saudi Arabia offers. Through private placements, top-notch investment banks in Saudi Arabia help sell complex securities to sophisticated clients who understand the potential risk and reward.Corporate Finance Advisory: In corporate finance advisory, investment banks provide services like deal structuring, risk management, liquidity, credit rating, and capital structuring.IPOs: Most of the investment banks in Saudi Arabia offer an initial public offering and initial private offering to organizations looking to enhance their funds to finance their extended businesses. These investment banks mainly focus on SMEs and help them bridge the gap from a small company to a medium-sized business.

List of Top Investment Banks in Saudi Arabia

Alistithmar Capital: This is one of the top boutique investment banks in Saudi Arabia. The firm was established in 2007 in Riyadh. It offers various services like mergers, acquisitionsAcquisitionsAcquisition refers to the strategic move of one company buying another company by acquiring major stakes of the firm. Usually, companies acquire an existing business to share its customer base, operations and market presence. It is one of the popular ways of business expansion.read more, corporate advisory, capital raising, and divestitures. Visit the official website.Al-Khabeer Capital: One of the top boutique investment banks in Saudi Arabia that offers financial advisory services. The firm was founded in 2008 in Jeddah. It provides debt and project finance, securitization, leasebackLeasebackLeaseback refers to a financial arrangement whereby the company that has sold the asset can take it back on lease from the buyer. Thus, the sale-leaseback facilitates the former owner to utilize the asset while its ownership lies with the purchaser. read more, and underwriting services. Visit the official website.Al Nefaie Investment Group: This is one of the top-notch investment banks in Saudi Arabia that offers financial advisory services. The firm was founded in Jeddah. It provides services like IPO, mergers, acquisitions, private placements, corporate restructuring, brokerage, and financial resources management services. Visit the official website.BMG Financial Group: BMG Financial Group offers investment banking to many clients, including government agencies, private companiesPrivate CompaniesA privately held company refers to the separate legal entity registered with SEC having a limited number of outstanding share capital and shareowners. read more, and investor groups. It was established in Jeddah. It provides corporate restructuring services, private placements, mergers & acquisitions, and IPOs. Visit the official website.FALCOM Financial Services: FALCOM Financial Services offer investment banking, wealth management, and securities trading services. It was established in 2007 in Jeddah. It offers mobile-based financial trading securities services and discretionary portfolio management. Visit the official website.Financial Transaction House: This is one of the top boutique investment banks in Saudi Arabia. The firm was established in 1994 in Jeddah. It offers various services like mergers, acquisitions, IPOs, financial and corporate restructuring, and private placements.Ithraa Capital LLC: This is one of the top boutique investment banks in Saudi Arabia. The firm was established in Riyadh. It offers various services like mergers, acquisitions, IPOs, financial and corporate restructuring, and private placements. Visit the official website.Jadwa Investment Company: Jadwa Investment Company is one of the top boutique investment banks in Saudi Arabia. The firm was founded in 2006 in Riyadh. It offers various stock tradingStock TradingStock trading refers to buying and selling shares of an entity listed on a stock exchange.read more services, securities brokerage, mergers, acquisitions, IPOs, financial and corporate restructuringRestructuringRestructuring is defined as actions an organization takes when facing difficulties due to wrong management decisions or changes in demographic conditions. Therefore, tries to align its business with the current profitable trend by a) restructuring its finances by debt issuance/closures, issuance of new equities, selling assets, or b) organizational restructuring, which includes shifting locations, layoffs, etc.read more, and private placements. Visit the official website.Middle East Financial Investment Company: This is one of the top-notch investment banks in Saudi Arabia that offers financial advisory services. The firm was founded in Riyadh. It provides various services like debt raising, initial public, and private offerings, mergers, acquisitions, private placements, project financeProject FinanceProject Finance is long-term debt finance offered for large infrastructure projects depending upon their projected cash flows. Moreover, an investor has to form a Special Purpose Vehicle (SPV) to acquire the same. read more, corporate restructuring, brokerage, financial engineeringFinancial EngineeringFinancial engineering is field which uses mathematical techniques, financial theories, engineering tools and advanced programming techniques to solve critical and complex financial problems.read more, and financial resources management services. Visit the official website.Saudi Hollandi Capital: Saudi Hollandi Capital is a subsidiary of Saudi Hollandi Bank. Saudi Hollandi Capital is one of the top-notch investment banks in Saudi Arabia that offers financial advisory services. The firm was founded in Riyadh. It provides various services like IPO, mergers, acquisitions, private placementsPrivate PlacementsPrivate placement of shares refers to the sale of shares of the company to the investors and institutions selected by the company, which generally includes banks, mutual fund companies, wealthy individual investors, insurance companies.read more, corporate restructuring, brokerage, and trading.Swicorp: This firm is one of the top-notch boutique investment banks focused on the Middle East and North Africa. It was founded in 1987 in Riyadh. It offers debt Debt Debt is the practice of borrowing a tangible item, primarily money by an individual, business, or government, from another person, financial institution, or state.read moreand equity financingEquity FinancingEquity financing is the process of the sale of an ownership interest to various investors to raise funds for business objectives. The money raised from the market does not have to be repaid, unlike debt financing which has a definite repayment schedule.read more, mergers, acquisitions, capital structuring, and corporate restructuring advisory services. Visit the official website.The Investor for Securities Company: TheInvestor for Securities Company(INVESCO) is one of the top-notch boutique investment banks focused on the Middle East and North Africa. It was established in Riyadh. It offers loan syndicationLoan SyndicationWhere a group of lenders usually collaborates through an intermediary being a lead financial institution, or syndicate agent, which organizes and administers the transaction, including repayments, fees, etc. to provide financial requirements to a single larger borrower (usually out of the capacity of a single lender) where the division of risk and returns takes place between each other takes place is known as loan syndication.read more, debt and equity private placements, mergers, acquisitions, capital structuring, and corporate restructuring advisory services. Visit the official website.

Investment Banking in Saudi Arabia – Recruitment Process

The recruitment process is more distinctive in Saudi Arabia than in the USA/UK.

Most of the recruitment happens by head-hunters. So here is a process you should follow: –

Go for a couple of internships: In Saudi Arabia, the market is still emerging. And big banks are looking for interns and permanent bankers who can help them leap. There is no shortage of opportunities, but employable candidates are scarce. When looking for internships, look for top-notch investment banks and go for summer internships (most popular in Saudi Arabia). After completing your training, you can look for investment banking jobs in Saudi Arabia. Also, have a look at How to Get Investment Banking InternshipHow To Get Investment Banking InternshipMany investment banks offer internships in investment banking, with durations ranging from 3 months to 2 years depending on the profile you choose as an intern. And if you complete your internship successfully, you will undoubtedly see yourself as an investment banker in the near future.read more.Networking is everything: Since most investment banking jobs in Saudi Arabia are unadvertised, networking is the key to receiving news about interviews. Therefore, whenever you get an opportunity to network, do it without hesitation. The maximum you will not get is a “Yes.” Please go through the list of the alumni network and contact them directly, take them to coffee/lunch or send them cold emails. Also, use LinkedIn to connect with investment bankers already pursuing their careers in small/big investment banks in Saudi Arabia.Connect with head-hunters: Your best bet is head-hunters or ex-peer groups, e.g., your ex-boss/ex-colleague. If you are new in the business, connect with head-hunters. Your job impresses them so much that they recommend you for the next round of interviews. To impress the head-hunters, you need to have impeccable technical skills, and your personality also should be attractive (communication, attitude, and dressing sense). If you can clear the “fitment” round and impress the head-hunters, the rest of the process would be easier.Interviews: In Saudi Arabia, clients do not worry about minute details. Thus, the focus of the discussion is mostly conceptual. You will clear most of the rounds if you are clear on concepts. However, do your homework and prepare for any technical question/case study analyses. However, do your homework and prepare for any technical question/case study analyses. They will give you a few days and ask you to present a case (especially on financial modeling/valuation). The last round of the interview would be with the partner and the MD of the company. And only the best candidates would see the light of the day.

Investment Banking in Saudi Arabia – Culture

The Saudi Arabian market culture is different from the working culture of the USA/Europe. Things happen slower in the Saudi Arabian investment banking market; the working environment makes people rarely move things fast. And as a result, getting things done quickly is not an easy task.So, if you are shifting from the USA/European work culture, you would face issues initially. It would help if you micromanaged everything to move things quickly.And unlike Europe/USA, people rarely work long hours in Saudi Arabia. It has been seen that the working hours are like any commercial or loansLoansA loan is a vehicle for credit in which a lender will give a sum of money to a borrower or borrowing entity in exchange for future repayment.read more, savings accounts, debit cards, credit cards, locker, etc.” url=”https://www.wallstreetmojo.com/retail-banking/”]retail bank[/wsm-tooltip]. People leave the office at 5:30 p.m. And they work 50 hours-60 hours a week; there are rarely 90 hours-100 hours of work per week.Two causes enable investment bankers in Saudi Arabia to work less. Firstly, most clients here are not very sophisticated and less demanding. So, there is no rush to get things done quickly. Secondly, investment bankers in Saudi Arabia do not pitch ideas actively. As a result, you do not need to work 100+ hours a week to meet the demands of the clients.

Investment Banking in Saudi Arabia – Salary

If you have ever worked in the USA/UK as an investment banker, moving to Saudi Arabia would be a great decision, at least in terms of salaries.

You will receive similar basic earningsEarningsEarnings are usually defined as the net income of the company obtained after reducing the cost of sales, operating expenses, interest, and taxes from all the sales revenue for a specific time period. In the case of an individual, it comprises wages or salaries or other payments.read more as you would in London/the USA, but the bonus you would earn would be double. Moreover, you do not need to pay any taxes. Any taxes mean – no income tax, no sales taxSales TaxThe government levies sales tax on the consumption of various goods and services as the percentage added to the product and services from which the government earns revenue and does the company’s welfare. In the United States, 38 different states have different taxes, from Alaska (1.76%) to Tennessee (9.45%).read more, no VAT whatsoever.

That means all you earn in Saudi Arabia as an investment banker is yours to keep. It has been seen that if you maintain a decent lifestyle, you will be able to save at least 50% of your total earnings after paying for rent, food, basic amenities, and traveling.

Now, let us look at the salary details of investment bankers in Saudi Arabia.

According to PayScale.com, here are the details of salaries based on job types: –

source: Payscale.com

The above graph gave us a fair idea of how much you can expect to earn at each job position. Now, let us look at the basic salary of investment banking in Saudi Arabia and the bonus by years of experience: –

From the above graph, we can see that the salary in investment banking hits a saturation point at 10+ years of experience. When you have less than ten years of experience, your basic pay will be proportionate to your years of experience. But once you hit ten years, it will become inversely proportional.

From the above graph, we reach the same conclusion. Till 10 years, a bonus is proportionate to the years of experience. However, after 10 years of experience, even the bonus starts to saturate.

Let us dive into the skills and see how different skills affect the salaries in investment banking in Saudi Arabia:

source: payscale.com

According to the above graph, the most valuable skill that has greatly affected the basic salaries is contract negotiation, and the least valuable skill is Microsoft Office/Word.

The salary of an investment banker is also affected by gender. Have a look at the below chart –

We can easily see that male investment bankers earn significantly more than females.

So, here are a few important points that you should keep in mind in terms of salaries: –

There is no tax so you could save a lot more in Saudi Arabia.Your salary at entry level would be around SAR 140,000 to 160,000.Years of experience matter a lot. Till ten years, your salary will increase proportionately and then it will saturate and drop.If you can develop contract negotiation skills, that is most valuable.Gender also affects salaries.

Investment Banking in Saudi Arabia – Exit Opportunities

“Exit opportunities” are prevalent in the USA but not in the UK, London, the Middle East, and Saudi Arabia.

And leaving a great job doesn’t make sense in Saudi Arabia.

Think about this. You have a job (investment banking) which is great. You can make a name for yourself as a banker. You have been earning significantly well. Whereas your peers in London or America earn the same money and pay taxes, you have been giving none. Whereas your peers in London or America earn the same money and pay a lot of taxes, you have been giving none. Moreover, instead of working 100+ hours a week (most prevalent in another part of the world), you are just working 50 hours-60 hours a week.

Why would you be foolish enough to let go of a job with such benefits?

Investment bankers in Saudi Arabia think similarly, and no one is ready to let go of investment banking jobs after a few years.

But a smaller percentage want more life challenges and would like to explore different fields. Thus, they exit investment banking and choose a diverse career.

In Saudi Arabia, if you have been working in investment banking for a while, you have two options. First, you can go to top-tier companies in investment banking. Second, you can go for private equity – a top-tier fund.

Since the work culture is similar (you will get 52 holidays in a year) and work ethic is standard (50 hours-70 hours a week), in private equityEquityEquity refers to investor’s ownership of a company representing the amount they would receive after liquidating assets and paying off the liabilities and debts. It is the difference between the assets and liabilities shown on a company’s balance sheet.read more, rarely would you see any changes (other than the nature of work).

Also, have a look at Investment Banking Exit Opportunities.Investment Banking Exit OpportunitiesAmong the several exit options available to investment bankers are: 1.Private Equity 2.Hedge Funds 3.Strategy Consulting 4.Fin-Tech 5.Advisory for large corporates.read more

Conclusion

After discussing the whole thing, we have one merit and one demerit of working in the investment banking industry in Saudi Arabia.The advantage is working fewer hours and earning much more tax-free income.On the other hand, the disadvantage is that if you continue to work fewer hours, you will not have that drive to work 100+ hours if required.Taking these two into account, you can decide whether Saudi Arabia is a good place to work or not. A temporary contract (e.g., two years) is what you can aim for initially and then plan for the future.