24.6 C
Friday, October 23, 2020

NCB-Samba To Merge Into Saudi Banking Heavyweight

RIYADH/DUBAI: Saudi Arabia’s biggest lender National Commercial Bank (NCB) has entered a binding merger agreement with smaller lender Samba Financial Group to create a combined entity with 837 billion riyals ($223 billion) in assets, NCB said on Sunday.

Low oil prices and weak economic growth are pushing bank consolidation across the Gulf.

Once completed, the NCB-Samba tie-up would create the Gulf region’s third largest lender by assets, after Qatar National Bank (QNB) and UAE’s First Abu Dhabi Bank.

NCB agreed to pay 28.45 riyals for each Samba share, valuing it at approximately 55.7 billion riyals ($14.85 billion), NCB said in a bourse filing. That corresponds to a 3.5% premium to Samba’s closing share price on Oct. 8, the last business day before Sunday’s announcement.

Saudi Arabia has encouraged consolidation in the banking sector as it seeks to create stronger entities able to support the role the private sector can play in its push to diversify its oil-dependent economy.

“The merged bank will become the largest bank in the Kingdom and a leading bank in the Middle East region with 171 billion riyals in market capitalisation,” NCB said.

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is a major investor in both banks, with current stakes of 44.29% in NCB and 22.91% in Samba.

After the merger, PIF will hold a 37.2% stake in the new entity while other substantial shareholders of the merged bank will include the Saudi Public Pension Agency with a 7.4% stake and the General Organisation for Social Insurance (GOSI) with a 5.8% stake.

Upon completion of the merger, shareholders of Samba will receive 0.739 new NCB shares for every one share of Samba, NCB said.

Samba chairman, Ammar Alkhudairy, will be chairman of the merged entity while NCB’s current chairman, Saeed al-Ghamdi, will be managing director and chief executive officer.

The new entity will own both investment arms of the current banks, NCB Capital and Samba Capital. The merger is not expected to result in involuntary redundancy of employees, NCB said without elaborating.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

Speak Your Mind


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Get in Touch


Recommend for You

WHO concerned about Europe’s coronavirus outbreak as ICU beds near capacity in some regions

A member of the medical staff treats a patient suffering from the coronavirus disease (COVID-19) at the Intensive Care Unit (ICU) of the Slany...

Trump Promotes Baseless, QAnon-Endorsed Conspiracy Theory Alleging Obama Staged Bin Laden’s Killing

Topline President Trump promoted a baseless conspiracy theory on Tuesday alleging the Obama administration covered up a plot to stage Osama Bin Laden’s death,...

Dr. Fauci says his kids aren’t coming home for Thanksgiving as Americans ‘sacrifice’ holiday gatherings to stay safe from coronavirus

Director of the National Institute for Allergy and Infectious Diseases Dr. Anthony Fauci testifies before the House Committee on Energy and Commerce on the...

Trump Has Said U.S. Is ‘Rounding The Turn’ On Coronavirus 28 Of The Last 46 Days

Topline President Trump has said the United States is “rounding the turn” – or “corner” or “bend” – on the coronavirus pandemic with shocking...

‘Out of control’: European leaders scramble to control the second wave, with a state of emergency and lockdowns

A nurse gets ready to enter a room to take care of a patient infected with Covid-19 at the intensive care unit of the...

Related Articles

Trump says he’s calling off stimulus negotiations with Democrats...

U.S. President Donald Trump speaks to reporters during a news conference in the Brady...

Anchor Brewing Has A New Brewmaster – And He’s...

SAN FRANCISCO, CA - AUGUST 03: Bottles of Anchor...

Plug-in hybrids called a ‘wolf in sheep’s clothing’ as...

Patrick Pleul | picture alliance | Getty ImagesCarbon dioxide emissions from plug-in hybrid electric...

Intuit and Credit Karma’s $7B Deal Means Bigger Data....

The announcement earlier this week that Intuit, the financial software giant, would be...