NCB and Samba announce merger to form Arab world’s third largest Lender

Saudi Arabia’s National Commercial Bank (NCB) and Samba Financial Group have signed a binding merger  agreement to create a combined entity with SAR 837 billion ($223 billion) in assets.

The merger of Saudi Arabia’s biggest lender National Commercial Bank (NCB) and Samba Financial Group has been hailed as an important step in the Kingdom’s financial sector.

The deal will make NCB the Arab world’s third-biggest banking entity and the first in the Middle East in terms of net income. It will become a leading bank in the Middle East region with SAR 171 billion ($46 billion) in market capitalization.

Following the merger the new bank will control a quarter of all banking in the Kingdom making it a true national champion in the Saudi banking industry.

It will become the Kingdom’s largest bank, serving approximately 25 percent of the retail and wholesale banking market. The merged bank will leverage NCB and Samba’s leading retail banking franchises, serving 26 percent of the market in retail loans and 29 percent of the market in retail liabilities.

Upon completion of the merger, Samba’s shares will be transferred in favor of NCB as the latter will issue several new shares, according to which the shareholders of the Samba will receive 0.739 new NCB shares for every one share of Samba, NCB said in a bourse filing on Sunday.

Once the transaction is completed, only NCB will survive, while Samba will cease to exist. Its shares will be canceled and new shares in NCB will be issued to its shareholders.

“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 capitalization,” NCB said.

The merger will lead to the formation of a strong regional lender with assets of SAR 837 billion, and the new entity will become the largest bank in the Kingdom, with a market value of SAR 171 billion, while the value of its loans will reach SR468 billion.

The merged entity would be the third-largest lender in the Arab world with more than SAR 837 billion ($223 billion) in assets, representing market share of 32 percent, as of the end of June 2020.

Both NCB and Samba have government entities as significant shareholders. Upon completion of the merger, NCB’s existing shareholders will own 67.4 percent of the combined entity and Samba’s shareholders will own 32.6 percent of the merged bank.

“This merger process marks the start of a new era for Saudi banking,” said Samba’s current Chairman Alkhudairy.

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