Goldman Sachs, The National Commercial Bank and NCB Capital Agree to Pursue Strategic Cooperation in Saudi Arabia

Goldman Sachs International ("Goldman Sachs"), The National Commercial Bank ("NCB") of Saudi Arabia and NCB Capital, a subsidiary of NCB, have signed a memorandum of understanding to pursue a transaction involving strategic cooperation in the Kingdom of Saudi Arabia.

The memorandum envisages a strategic cooperation agreement between Goldman Sachs and NCB Capital, a company under formation and approved by the Saudi Arabian Capital Market Authority. NCB Capital is being created pursuant to the 2004 Capital Market Authority Directive, which mandates the separation of investment banking activities from commercial banking operations. When formed, NCB Capital will acquire NCB's securities, investment management and investment banking operations.

Goldman Sachs and NCB Capital intend to cooperate across a broad range of business areas in or relating to Saudi Arabia, including investment management, securities, investment banking and principal investing. The memorandum also contemplates that Goldman Sachs will make an equity investment in NCB Capital.

The completion of such a transaction between Goldman Sachs and NCB Capital will be subject to a number of conditions, including the satisfactory completion by the parties of financial, legal and business due diligence, negotiation, execution and delivery of binding agreements and receipt of all requisite approvals.

"We are very pleased with the proposed transaction between Goldman Sachs International and NCB Capital," Abdullah Bahamdan, Chairman of The National Commercial Bank, said today. "The economies of the region, in general, and the Kingdom, in particular, are booming and present vast opportunities. The combination of NCB Capital's presence on the ground with capable management and Goldman Sachs International's' world class product platform and cutting edge technology provides the homegrown entity the strongest possible support as it harnesses these opportunities while offering its customers a wide selection of top notch investment alternatives."

"We are delighted to be working with NCB Capital," said Lloyd C. Blankfein, Chairman and Chief Executive Officer of The Goldman Sachs Group, Inc. "The proposed transaction represents an important opportunity for Goldman Sachs and serves to reinforce our commitment to contributing to the further development of the Kingdom's financial markets. We are focused on building a broad business in the region and see this initiative as a key part of our strategy. "

Abdulkareem Abu Alnasr, Chairman of NCB Capital, had this to add, "We could not hope for a better start than what we have. NCB Capital is the first subsidiary of a local bank to be licensed by the Capital Markets Authority. And now, with the proposed transaction with Goldman Sachs International, NCB Capital is poised to confront the challenges of a very vibrant market shoulder to shoulder with the world's premier investment bank. I see a very promising and exciting future ahead of us."

Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services to a substantial and diversified client base, that includes corporations, financial institutions, governments, and high net-worth individuals. Founded in 1869, it is one of the world's oldest and largest investment banking firms. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.