Saudi eyes deal to create $182 billion mega bank

Bloomberg

National Commercial Bank (NCB), Saudi Arabia’s biggest lender, started initial talks with Riyad Bank for a merger — a deal that would create the Gulf’s third-biggest lender with $182 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.
Saudi Arabia is exploring potential mergers to boost its financial services industry after the combination of Saudi British Bank and Alawwal Bank, Bloomberg had earlier reported, citing people familiar with the matter. The kingdom’s sovereign wealth fund, which owns stakes in some of the biggest lenders, is weighing which banks could be merged to increase scale and competition, the people said, asking not to be identified because the talks are private.
The Public Investment Fund, Saudi Arabia’s wealth fund, owns about 44 percent of National Commercial Bank and 22 percent of Riyad Bank, according to Bloomberg data. National Commercial Bank has a market value of $38 billion and Riyad Bank $14 billion.
National Commercial Bank shares climbed 28 percent this year to trade near the highest level since they were sold in 2014. Riyad Bank has advanced 44 percent this year.
There are around 30 local and international lenders in Saudi Arabia, serving more than 30 million people.
In Saudi Arabia, the biggest Arab economy, HSBC Holdings Plc’s unit in October agreed to buy a local rival part-owned by Royal Bank of Scotland Group Plc in a $5 billion deal to create the kingdom’s third-largest lender.