Bank Merger Talks Seek To Create National Champion

Big Saudi banks are about to get even bigger.

Merger talks between two of the largest, most-profitable and best-capitalized banks in Saudi Arabia—National Commercial Bank (NCB) and Samba Financial Group—aim to create a national champion able to compete with the biggest banks in the region. The merger would also promote Crown Prince Mohammed bin Salman’s plan to make the kingdom’s financial system more efficient.

The Crown Prince chairs the powerful Public Investment Fund, which holds a 23% stake in Samba and a 44% share of NCB. With the PIF behind it, the merger could be completed in a matter of months.

The combined institution would dominate the kingdom’s corporate market and would be the Gulf’s third-largest bank by assets, following Qatar National Bank and First Abu Dhabi Bank. The $15.3 billion deal comes at a time when banks throughout the region are struggling with the economic fallout of low oil prices and the coronavirus, and it could signal the beginning of a wave of bank mergers. The NCB-Samba hookup could be the biggest this year among banks worldwide.