AGL 38.54 Increased By ▲ 0.97 (2.58%)
AIRLINK 129.50 Decreased By ▼ -3.00 (-2.26%)
BOP 5.61 Decreased By ▼ -0.03 (-0.53%)
CNERGY 3.86 Increased By ▲ 0.09 (2.39%)
DCL 8.73 Decreased By ▼ -0.14 (-1.58%)
DFML 41.76 Increased By ▲ 0.76 (1.85%)
DGKC 88.30 Decreased By ▼ -1.86 (-2.06%)
FCCL 35.00 Decreased By ▼ -0.08 (-0.23%)
FFBL 67.35 Increased By ▲ 0.85 (1.28%)
FFL 10.61 Increased By ▲ 0.46 (4.53%)
HUBC 108.76 Increased By ▲ 2.36 (2.22%)
HUMNL 14.66 Increased By ▲ 1.26 (9.4%)
KEL 4.75 Decreased By ▼ -0.11 (-2.26%)
KOSM 6.95 Increased By ▲ 0.10 (1.46%)
MLCF 41.65 Decreased By ▼ -0.15 (-0.36%)
NBP 59.60 Increased By ▲ 1.02 (1.74%)
OGDC 183.00 Increased By ▲ 1.75 (0.97%)
PAEL 26.25 Increased By ▲ 0.55 (2.14%)
PIBTL 5.97 Increased By ▲ 0.14 (2.4%)
PPL 146.70 Decreased By ▼ -1.70 (-1.15%)
PRL 23.61 Increased By ▲ 0.39 (1.68%)
PTC 16.56 Increased By ▲ 1.32 (8.66%)
SEARL 68.30 Decreased By ▼ -0.49 (-0.71%)
TELE 7.23 Decreased By ▼ -0.01 (-0.14%)
TOMCL 35.95 Decreased By ▼ -0.05 (-0.14%)
TPLP 7.85 Increased By ▲ 0.45 (6.08%)
TREET 14.20 Decreased By ▼ -0.04 (-0.28%)
TRG 50.45 Decreased By ▼ -0.40 (-0.79%)
UNITY 26.75 Increased By ▲ 0.35 (1.33%)
WTL 1.21 No Change ▼ 0.00 (0%)
BR100 9,806 Increased By 37.8 (0.39%)
BR30 29,678 Increased By 278.1 (0.95%)
KSE100 92,304 Increased By 366.3 (0.4%)
KSE30 28,840 Increased By 96.6 (0.34%)

RIYADH/DUBAI: Saudi Arabia’s biggest lender National Commercial Bank (NCB) has entered a binding merger agreement with smaller lender Samba Financial Group to create a combined entity with 837 billion riyals ($223 billion) in assets, NCB said on Sunday.

Low oil prices and weak economic growth are pushing bank consolidation across the Gulf.

Once completed, the NCB-Samba tie-up would create the Gulf region’s third largest lender by assets, after Qatar National Bank (QNB) and UAE’s First Abu Dhabi Bank.

NCB agreed to pay 28.45 riyals for each Samba share, valuing it at approximately 55.7 billion riyals ($14.85 billion), NCB said in a bourse filing. That corresponds to a 3.5% premium to Samba’s closing share price on Oct. 8, the last business day before Sunday’s announcement.

Saudi Arabia has encouraged consolidation in the banking sector as it seeks to create stronger entities able to support the role the private sector can play in its push to diversify its oil-dependent economy.

“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 capitalisation,” NCB said.

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is a major investor in both banks, with current stakes of 44.29% in NCB and 22.91% in Samba.

After the merger, PIF will hold a 37.2% stake in the new entity while other substantial shareholders of the merged bank will include the Saudi Public Pension Agency with a 7.4% stake and the General Organisation for Social Insurance (GOSI) with a 5.8% stake. Upon completion of the merger, shareholders of Samba will receive 0.739 new NCB shares for every one share of Samba, NCB said. Samba chairman, Ammar Alkhudairy, will be chairman of the merged entity while NCB’s current chairman, Saeed al-Ghamdi, will be managing director and chief executive officer.

The new entity will own both investment arms of the current banks, NCB Capital and Samba Capital.

Comments

Comments are closed.