Saudi Arabian banks National Commercial Bank (NCB) and Riyad Bank have decided not to pursue their proposed merger aimed at creating an enlarged financial organisation with about $183bn in assets under management.
Both the banks did not reveal the reason for scrapping the talks. It was almost a year ago when the two banks got together for initial discussions on a possible merger.
The merger talks between the Saudi Arabian banks were initiated just few months after two other lenders in the kingdom – SABB and Alawwal Bank agreed to merge in a $5bn deal. The SABB, Alawwal Bank merger was wrapped up in July 2019 to create the third largest bank in Saudi Arabia in terms of assets.
NCB, which is also called AlAhli Bank, is considered to be largest bank in Saudi Arabia in terms of assets. The bank had SAR479bn ($127.75bn) assets under management as per its second quarter 2019 data.
Overall, the bank has 405 branches and 3,770 ATMs across Saudi Arabia.
Riyad Bank’s total assets were SAR246.1bn ($65.64bn), as of 30 June 2019. The bank has a network of more than 312 branches and more than 2,592 ATMs in Saudi Arabia.
In separate stock exchange filings, the two Saudi Arabian banks stated: “The boards of both banks have decided to end preliminary merger talks and not to continue with the merger study.”
Riyad Bank in stock exchange filing said that its strategic vision will help it to continue developing its products, technologies, and services for the interests of its shareholders, customers, and employees while improving its competitive position and leadership, reported Saudi Gazette.
Saudi’s sovereign wealth fund is a common shareholder in NCB and Riyad Bank
NCB and Riyad Bank have a common shareholder in the form of Public Investment Fund of Saudi Arabia, reported Bloomberg. The sovereign wealth fund of the kingdom owns around 44% in NCB and in Riyad Bank has a stake of 22%.
In October 2019, NCB entered into a partnership with Mastercard to promote payments innovation in Saudi Arabia. The two organisations agreed to join forces on launching a suite of card-based payment products.
Furthermore, the parties will collaborate to develop and deliver advanced technology solutions that enhance the payment experience for NCB’s customers.
