MoneyGram International, Inc. ( NYSE: MGI, MGI message board ), a leading global money transfer company, saw a share price surge yesterday of almost 40% after the company announced that they have signed a deal with the largest bank in the Middle East - offering their money transfer services at all 1,400 of National Commercial Bank's ATM locations in Saudi Arabia. Anthony Ryan, president and CEO of MoneyGram International states that “Saudi Arabia is the second largest send market in the world behind the United States, and our alliance with a premier financial institution like National Commercial Bank represents a significant opportunity for MoneyGram’s expansion plans in the Middle East.”
With more than 6 million foreigners living in Saudi Arabia, 27 % of the population being foreign born, as well as being a global remittance leader ( Saudi Arabia saw remittances grow more than $17 billion during 2006 according to the World Bank, and that number is increasing exponentially) - and the fact that there is an ever increasing number of Saudi citizens who are traveling, studying and working abroad - means the deal should come as no suprise, but should, hopefully, come with great benefit for MoneyGram.
The deal comes not two weeks after MoneyGram announced their expansion agreement with the second largest government bank in India, Punjab National Bank, ( India being one of the world's largest remittance markets ) whereby the bank will offer MoneyGram's services across their 4,600 strong network of bank branches in India. The program, which is set to be initiated in phases but completed before the year end, ( along with the National Commercial Bank deal ) comes as part of MoneyGram's ambitious, yet obviously necessary global expansion plans. MoneyGram, after opening trading Wednesday at $1.78, saw rise throughout the day, to finally close at $2.35.
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