Saudi's National Commercial Bank buys Samba in $14.8B deal
DUBAI, United Arab Emirates (AP) - The National Commercial Bank of Saudi Arabia announced on Sunday that it would buy $ 14.8 billion worth of rival lender Samba Financial Group, creating the UK's largest bank .
The bank will control $ 223 billion in assets and $ 46 billion in market capitalization after the merger receives and completes regulatory approvals, the National Commercial Bank said in a statement on the Tadawul stock market in Riyadh, in which the deal was announced.
The new bank will control a quarter of all banking operations in the kingdom, it said.
The NCB pays Samba a premium of 3.5% on the closing price of its stock on Thursday, which dissolves it into the NZB brand.
The largest shareholders in the bank will be the Private Investment Fund in Saudi Arabia, the Public Pension Agency and the General Organization for Social Insurance, all of which are government agencies.
The two banks described the merger as fitting in with the Kingdom's Vision 2030 Plan, developed by Saudi Arabia's confident Crown Prince Mohammed bin Salman. This plan sees Saudi Arabia decoupling from reliance on oil exports while creating new jobs for its millions of young people.
"With Vision 2030, Saudi Arabia is in a historic transformation," said NCB Chairman Saeed al-Ghamdi in a statement. "Our goal is to create a national champion who can facilitate the transformation envisaged in Vision 2030 and create a pioneer for the next generation." Banking services that power tomorrow's industry leaders. "
The NCB was Saudi Arabia's first bank to be officially licensed in the Kingdom in 1953 and formed out of two forex trading houses. Samba grew out of Citibank, which established a presence in the oil-rich kingdom in 1955. The bank became the Saudi American Bank in 1980 following a royal decree, with Citibank slowly exiting over time until it sold its last shares in 2004.
The merger has been rumored for months. The rating agency Moody's says it will help the NCB to become one of the world's largest banks, alongside the Saudi Al Rajhi bank and the Kuwait Finance House, in compliance with Sharia or Islamic law. It also comes as the kingdom grapples with the coronavirus pandemic and oil prices, which have fallen to around $ 40 a barrel amid a global economic slowdown.
"A combination of lower oil prices, worsening economic conditions and fierce competition between banks is creating a new wave of mergers and acquisitions in Saudi Arabia and across the Gulf region," Moody's said in September.
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