Bahrain-based Addax Bank was given the go-ahead by Saudi Arabia's Capital Market Authority to set up a subsidiary.

As part of its expansion plan, the bank has obtained an investment banking licence from the Saudi regulator for its SR200 million ($53.4 million) affiliate Addax Capital.

"We have obtained a licence to operate in Saudi market, the largest in the Middle East," said Addax chief executive officer Yousef Al Essa.

"The launch of Addax Capital will enable our investors to penetrate into the Saudi market and have access to vast untapped investment opportunities there."

"Saudi Arabia is the largest economy in the GCC and Mena region and one with significant potential. Therefore, we are very optimistic about the future of Addax Capital, which will be supported by Addax Bank in Bahrain."

"We have a great group of partners in our Saudi venture that will also be an invaluable source of support."

Addax Capital is expected to commence operations during the third quarter of this year from its headquarters in Riyadh.

Services and products to be provided include corporate finance, financial advisory, brokerage, asset management and direct investments.