NCB, Samba shareholders approve merger to create Saudi National Bank

New entity will be by far the largest bank in the kingdom with over $239bln in assets

Saudi traders monitor stock information at the Saudi stock market in Riyadh, Saudi Arabia August 25, 2020.

Saudi traders monitor stock information at the Saudi stock market in Riyadh, Saudi Arabia August 25, 2020.

REUTERS/Ahmed Yosri

Shareholders of National Commercial Bank (NCB) and Samba Financial Group (Samba) have approved the proposal to create a combined entity with 896 billion riyals ($239 billion) in assets.

The voting, held in two separate extraordinary general assembly (EGA) meetings on March 1, is one of the final steps to merge the two banks and establish Saudi National Bank, which is scheduled to launch on April 1, 2021.

“[The new entity] will be by far the largest bank in Saudi Arabia with over [896 billion riyals] in total assets, 127 billion riyals in shareholders’ equity and a combined net profit of 15.6 billion riyals,” a statement issued on Tuesday said.

Once the merger takes effect, Samba’s shares will be de-listed from the Saudi Stock Exchange (Tadawul). The company will also be dissolved with all its assets, liabilities and operations transferring into Saudi National Bank, the statement said.

“The result of the vote at the EGA speaks volumes of how attractive the value proposition for this merger is. Saudi National Bank will deliver value not just for our esteemed shareholders, customers and employees, but for the nation as a whole,” said Saeed Al-Ghamdi, chairman of NCB.

“This is a historic milestone for the Saudi Banking sector, which will now have a powerhouse that is truly a bank for all. Saudi National Bank will unlock significant opportunities as a larger and exceptionally well-capitalised bank,” added Alkhudairy.

Initial agreement

Plans for the merger were announced early last year. Last June, an initial agreement was signed to merge NCB, which in 2020 had a market value of nearly $30 billion, with smaller lender Samba Financial Group.

According to the latest statement, the new entity will benefit from a “strengthened competitive position as a superior retail banking franchise and the largest wholesale lender” in Saudi Arabia.

In preparation for the proposed merger, NCB had obtained approval from the CMA to raise its capital from 30 billion riyals to 44.78 billion riyals in order to issue new shares in NCB to Samba shareholders.

The merged bank will have a new management team that will be headed by Ammar Alkhudairy as chairman and Saeed Al-Ghamdi as managing director and group chief executive officer.

(Writing by Cleofe Maceda; editing by Seban Scaria)

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© ZAWYA 2021

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