Saudi’s NCB set to pick JPMorgan to advise on bank merger talks

Saudi’s biggest lender is holding merger talks with smaller rival Riyad Bank

Saudi Arabia’s biggest lender, National Commercial Bank, is set to pick JPMorgan to advise on its merger talks with smaller rival Riyad Bank, several sources familiar with the matter said.

NCB, the kingdom’s biggest lender by assets, and Riyad Bank said in December they have begun preliminary discussions to merge, in a move that would further extend NCB’s lead over its closest rivals by boosting its assets by almost a third to $183bn.

NCB was not immediately available to comment, while JPMorgan declined to comment. Reuters reported on Monday that Riyad Bank has chosen Goldman Sachs for an advisory role.

Read: Saudi’s Riyad Bank selects Goldman to advise on merger talks with NCB

JPMorgan’s selection is subject to ratification by NCB’s board, the sources said.

A wave of bank mergers is sweeping in the Gulf region, as profit margins have been squeezed by lower government and consumer spending in the face of weak oil prices.

Two of the biggest banks in the United Arab Emirates, where regulatory pressure is also mounting on smaller banks in particular, linked up to create First Abu Dhabi Bank in 2017.