Proposed Saudi banking mega-merger could force competitors to react

  • NCB-Samba would be the third-largest bank in the MEA region and could act as a springboard for international expansion
  • Challenging environment (Covid-19, low oil prices and interest rates) and regional competition are likely key catalysts
  • Both banks have complementary strengths with scope for cost synergies, but announced terms favour Samba shareholders
Proposed Saudi banking mega-merger could force competitors to react

One year after the SABB-Al Awwal merger was consummated, National Commercial Bank (also known as Al Ahli Bank) and Samba Financial Group have signalled their intention to merge. We think the motivations for such a transaction include the current difficult operating environment, and a desire to create a regional champion; other Saudi and regional banks may be forced to respond. However, as the aborted NCB-Riyad Bank alliance shows, the road ahead remains uncertain.

In our full report, available for Insights Pro subscribers, we highlight our thoughts regarding:

  • The transaction terms

  • The financial implications for both sets of shareholders

  • Why the merger is being proposed

  • What the new NCB-Samba would look like

  • Key challenges and concerns regarding the transaction

  • Which other combinations could follow

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