The National Commercial Bank NCB

51.80 0.70 1.36 %

NCB Saudi Arabia’s biggest bank explores merger possibility

(12/25/2018 7:57:00 AM)

National Commercial Bank, Saudi Arabia’s biggest lender, has started initial talks with Riyad Bank for a merger, a deal that would create an entity with $182 billion (Dh668 billion) in assets. Talks may not result in a transaction, National Commercial Bank said in a statement.

The lender said it has coordinated the move with the central bank and that a deal isn’t expected to result in forced dismissal of staff. An agreement between National Commercial Bank and Riyad Bank could create the third-biggest lender by assets in the six-nation Gulf Cooperation Council, according to data by Bloomberg. The Public Investment Fund, Saudi Arabia’s main sovereign wealth fund, owns about 44 per cent of National Commercial Bank and 22 per cent of Riyad Bank, according to the data.

National Commercial Bank shares climbed 28 per cent this year to trade near the highest level since they were sold in 2014. Riyad Bank has advanced 44 per cent this year.

Banks elsewhere in the Middle East are also looking at consolidation. Three of Abu Dhabi’s state-linked banks are in talks to combine into an institution with $110 billion of assets. The negotiations follow a tie-up between Abu Dhabi’s two biggest banks last year and the merger of sovereign wealth funds in March.

There are fewer than 30 local and international lenders in Saudi Arabia, serving more than 30 million people. The UAE has almost 50 banks catering to a population of less than 10 million.

Gulf News