Saudi Arabia’s National Commercial Bank (NCB) and Riyad Bank have begun preliminary discussions to study the possibility of a merger, an important step in the financial sector in the country.
The NCB said in a press statement on Saudi Tadawul website Monday that entering into these discussions does not necessarily mean that the merger will take place between the two parties.
It further added that any agreement would be subject to regulatory and shareholder approvals of both banks, and there would be no forced job losses.
The National Bank pointed out that coordination with the Saudi Arabian Monetary Agency (SAMA) regarding the merger requirements was initiated before the start of these talks. However, it explained in the press statement that "formal approvals are still required before the merger is completed."
NCB indicated that any future developments will be announced in a timely manner, confirming that shareholders will be informed of any upcoming developments in this regard.
Riyad Bank also announced its board of directors’ approval to start preliminary discussions with NCB regarding the merger of the two banks.
If completed, the merger will lead to a very strong capital structure with each bank’s capital reaching about $8 billion.
The announcement of merger discussions follows the signing of a binding merger agreement in October by Saudi British Bank (SABB) and al-Awwal Banks.
The Financial Sector Development Program 2020, recently announced by Saudi Arabia, is a new global model for exploring development and overcoming challenges, thus creating a very strong financial sector in all its details in line with Vision 2030.
The Program, is one of the 12 executive programs launched by the Council of Economic and Development Affairs (CEDA) to achieve the objectives of Vision 2030. It seeks to develop the financial sector as a diversified and effective financial services sector to support the development of the national economy by stimulating savings, finance and investment.
