NCB, Samba shareholders approve merger to create Saudi National Bank, kingdom’s biggest lender

Saudi Arabia’s biggest banks National Commercial Bank (NCB) and Samba Financial Group (Samba) announced that their shareholders have approved the merger to create the kingdom’s largest lender.

The merged entity will be called Saudi National Bank and operations under the new name and structure are planned to start on April 1, 2021.

The announcement comes after the merger received all the regulatory approvals, including from the Saudi Central Bank (SAMA), General Authority for Competition (GAC), Capital Markets Authority (CMA), and Saudi Stock Exchange (Tadawul).

Shareholders confirmed that Samba chairman Ammar Alkhudairy will serve as Saudi National Bank’s chairman while NCB chairman Saeed Al-Ghamdi will serve as the managing director and group CEO.

Saudi National Bank will now be the biggest in the country with roughly 30 per cent market share across all metrics, a statement said.

In October last year, NCB – Saudi Arabia’s largest lender by assets – confirmed that it would offer $15bn to buy Samba Financial Group, paying SAR28.45 for each Samba share.

The new bank is estimated to have total assets of more than $220bn, creating the third-largest lender in the GCC region.

Read: Year’s biggest bank merger sealed as Saudi rivals agree on deal

In preparation for the proposed merger, NCB received approval from the CMA to increase its capital from SAR30bn to SAR44.78bn in order to issue new shares in NCB to Samba shareholders with a share swap ratio of 0.739 NCB ordinary shares for each Samba ordinary share, upon closing of the transaction.

Samba shares will be de-listed from the Tadawul on the effective date of the merger, and the company dissolved with all its assets, liabilities and operations transferring into Saudi National Bank.

NCB’s existing shareholders will own 67.4 per cent and Samba’s shareholders will own 32.6 per cent of the combined entity.

The kingdom’s sovereign wealth fund – the Public Investment Fund – will be the largest shareholder in Saudi National Bank with a 37.2 per cent holding.

Ammar Alkhudairy said: “This vote of confidence for the merger confirms the compelling commercial and strategic rationale of the deal. 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.”

Saeed Al-Ghamdi added: “We will be uniquely positioned to transform the Saudi banking sector and propel the kingdom closer to its Vision 2030 goals.”

The deal comes after NCB dropped plans to merge with Riyad Bank to create a bank with about $200bn of assets.

Read: Saudi’s biggest bank NCB ends merger talks with Riyad Bank