Saudi Arabia’s NCB bank in $15.6bn merger talks with local rival

Saudi Arabia’s NCB bank in $15.6bn merger talks with local rival

Saudi Arabia's National Commercial Bank is in talks to acquire Samba Financial Group for up to $15.6bn in a merger that would create the oil-rich Gulf's third-biggest lender by assets.NCB, the kingdom's largest bank with a market value of almost $30bn, said in a statement to the stock market that it had signed an initial agreement with Samba to create a combined entity with almost $214bn in assets. Under the proposed stock deal, it has agreed to pay a premium of between 19.2 per cent and 27.5 per cent for Samba, which is among Saudi Arabia's top five largest banks.The merger is a sign that Riyadh is pushing ahead with the consolidation of its banking sector as the kingdom grapples with the twin shocks of the coronavirus pandemic and a slump in oil prices. The IMF forecasts that the economy in the world's top oil exporter will contract 6.8 per cent this year."This is not a Covid-driven deal, these two banks are two of the most profitable and best capitalised in the kingdom,“ said a person familiar with the transaction. "This deal first and foremost has a strong commercial logic of having a big-scale player that becomes more profitable. And