(Adds details of board meeting, Aramco background)
By Saeed Azhar
DUBAI, Jan 23 (Reuters) - Citigroup has won formal approval from Saudi Arabia's Capital Market Authority to begin investment banking business there, the U.S. bank said on Tuesday.
More than a dozen foreign banks have licences to operate branches in Saudi Arabia, battling for business resulting from the kingdom's reforms to wean its economy off oil revenues.
Citi was among the banks invited to pitch for roles in the stock market listing of Saudi oil company Aramco, sources told Reuters earlier this month, in an initial public offering (IPO) that aims to raise $100 billion.
"Saudi Arabia is a regional economic leader and a strategically important market for Citi," Citigroup chief executive Mike Corbat said in a statement.
Citigroup Saudi Arabia, which obtained a capital markets licence in April enabling its return to the oil-rich kingdom after an absence of almost 13 years, said it had held its inaugural board meeting in Riyadh.
Citigroup pulled out of Saudi Arabia after five decades in 2004 when it sold its 20 percent stake in Samba Financial Group , reallocating capital to core investments.
But in 2015 it won permission from the Saudi Arabian regulator to invest directly in the local stock market, the first step in its return.
And last year it obtained a licence that allows it to provide services such as investment banking, debt and equity capital markets as well as securities research to its local and international institutional clients.
"Today's board meeting is a culmination of efforts to re-establish an onshore operation serving our client base," Carmen Haddad, Citi's Country Officer-Saudi Arabia, said.
Haddad told Reuters late last year that the bank wants to hire up to 20 bankers in Saudi Arabia to capitalise on investment banking opportunities that arise from the kingdom's economic reform programme.
Saudi Aramco has also appointed Citi to lead a $2 billion financing backed by Britain, guaranteed by UK Export Finance, the British export credit agency. (Editing by Alexander Smith)