Morgan Stanley has received regulatory approval to establish its Middle East headquarters in Saudi Arabia, the latest Western bank to expand its operations in the country.

“Establishing a regional HQ in Riyadh reflects the growth and development of Saudi Arabia and is a natural progression of our long history in the region,” Abdulaziz Alajaji, the bank's CEO for Saudi Arabia and co-head of the Middle East and North Africa region, said in a statement.

Citigroup said late on Friday it had received approval for a regional HQ licence from Saudi Arabia's Ministry of Investment.

IFR reported on Friday that Saudi Arabia is putting pressure on major banks and other international firms to move their regional headquarters and top executives to the country, with banking industry sources saying firms are often told it is necessary to win business in the country.

Competition for investment banking fees has intensified between Saudi Arabia and the United Arab Emirates this year, as both countries seek to build the leading regional hub for capital markets activity.

Source: IFR