Saudi’s NCB, Samba merger deal concludes formally

By Ashika Rajan, Trainee Reporter
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The merger of Saudi Arabia’s largest retail lender National Commercial Bank (NCB), and its smaller competitor, Samba Financial Group (Samba), is now complete, with Samba shareholders acquiring new shares in the consolidated entity.

According to Saudi National Bank (SNB), the shares issued to former Samba shareholders are now listed on the Saudi stock exchange. The merged banking institution has begun its operations on April 1.

“As set out in the shareholder circular issued by SNB, the merger has been completed,” the company said in a statement to the exchange.

Following approval by the Saudi Central Bank (SAMA), the General Authority for Competition (GAC), the Capital Markets Authority (CMA), and the stock exchange, shareholders of NCB and Samba voted in favor of the merger last month. In October, the two leaders agreed to merge their balance sheets to create the kingdom’s largest bank, with an asset base of $239 billion.

NCB obtained permission from the CMA to increase its capital from $7.9 billion to $11.94 billion in preparation for the merger, enabling it to sell new shares to Samba shareholders. For each Samba ordinary share, the share swap ratio was set at 0.739 NCB ordinary shares.

SNB, which has its headquarters in Riyadh, Saudi Arabia’s capital, will have a 30 percent market share and will benefit from increased size, “the sharing of best practice and unprecedented depth of employee talent”, the bank said.

SNB appointed Mr. Ammar Al Khudairy as Chairman of the Board of Directors, succeeding Mr. Saeed Alghamdi, who oversaw the merger. With the completion of the merger, the Public Investment Fund (PIF), the kingdom’s sovereign investment arm, has become the new lender’s biggest shareholder, holding a 37.2 percent stake.

SNB is managed by the Public Pension Agency (7.4 percent) and the General Organisation for Social Insurance (5.8 percent).

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