Saudi Arabia’s NCB in Preliminary Merger Talks with Riyad Bank

Saudi Arabia’s National Commercial Bank (NCB) and Riyad Bank have begun preliminary discussions to study the possibility of a merger. (AFP)
Saudi Arabia’s National Commercial Bank (NCB) and Riyad Bank have begun preliminary discussions to study the possibility of a merger. (AFP)
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Saudi Arabia’s NCB in Preliminary Merger Talks with Riyad Bank

Saudi Arabia’s National Commercial Bank (NCB) and Riyad Bank have begun preliminary discussions to study the possibility of a merger. (AFP)
Saudi Arabia’s National Commercial Bank (NCB) and Riyad Bank have begun preliminary discussions to study the possibility of a merger. (AFP)

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.



Moody's Upgrades Saudi Arabia's Credit Rating

Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
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Moody's Upgrades Saudi Arabia's Credit Rating

Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters

The credit rating agency “Moody’s Ratings” upgraded Saudi Arabia’s credit rating to “Aa3” in local and foreign currency, with a “stable” outlook.
The agency indicated in its report that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification and the robust growth of its non-oil sector. Over time, the advancements are expected to reduce Saudi Arabia’s exposure to oil market developments and long-term carbon transition on its economy and public finances.
The agency commended the Kingdom's financial planning within the fiscal space, emphasizing its commitment to prioritizing expenditure and enhancing the spending efficiency. Additionally, the government’s ongoing efforts to utilize available fiscal resources to diversify the economic base through transformative spending were highlighted as instrumental in supporting the sustainable development of the Kingdom's non-oil economy and maintaining a strong fiscal position.
In its report, the agency noted that the planning and commitment underpin its projection of a relatively stable fiscal deficit, which could range between 2%-3% of gross domestic product (GDP).
Moody's expected that the non-oil private-sector GDP of Saudi Arabia will expand by 4-5% in the coming years, positioning it among the highest in the Gulf Cooperation Council (GCC) region, an indication of continued progress in the diversification efforts reducing the Kingdom’s exposure to oil market developments.
In recent years, the Kingdom achieved multiple credit rating upgrades from global rating agencies. These advancements reflect the Kingdom's ongoing efforts toward economic transformation, supported by structural reforms and the adoption of fiscal policies that promote financial sustainability, enhance financial planning efficiency, and reinforce the Kingdom's strong and resilient fiscal position.