More merger talks among big GCC banks

  • 2nd, July, 2020
More merger talks among big GCC banks

Two Saudi banks, National Commercial Bank (NCB) and Samba Financial Group, announced on 25 June that they had entered into a framework agreement to negotiate a merger. The announcements stated that both banks intended to complete due diligence and agree financial terms within four months of the announcement. 

NCB is the biggest Saudi bank, with equity of $18.6bn at the end of 2019. Samba is the fourth biggest with equity of $12.1bn. NCB had previously considered a merger with Riyad Bank, but those talks were called of in December 2019, one year after they were initiated.

Two Qatari banks, Masraf al-Rayan and Al Khalij Commercial Bank announced on 30 June that they had entered into initial merger discussions. Masraf al-Rayan is an Islamic Bank and Al-Khalij is a conventional bank. The announcement made clear that a merged bank would be run on Shari’ah-compliant principles. 

At the end of 2019, Masraf al-Rayan had shareholders’ equity of $3.9bn and Al-Khalij had equity of $1.9bn. Masraf al-Rayan had previously considered a three-way merger with Barwa Bank (Shari’ah-compliant) and International Bank of Qatar (conventional). That merger went ahead without Masraf al-Rayan last year.