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OPINION

Bank M&A set to surge in Saudi Arabia

The $15 billion merger that created Saudi National Bank is tipped to kick-start a cycle of consolidation in the Kingdom’s banking sector.

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More bank mergers and digital lenders are the order of the day in Saudi Arabia, as the Kingdom seeks to transform itself into a developed financial economy by 2030.

In October, a $15 billion merger brought together National Commercial Bank (NCB), the country’s largest lender by assets, with local rival Samba Financial Group.

The new organization, renamed Saudi National Bank (SNB) on April 1 and headed by chief executive Saeed Al-Ghamdi, is the Kingdom’s largest bank by assets and market capitalization.

It posted a net profit of SR2.07 billion ($552 million) in 2020, down 32% on an annualized basis in a Covid-impaired year.

Analysts and bankers tip the move to usher in a long-awaited cycle of consolidation in a big, but for too long, sleepy and overbanked market.

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Asad Ahmed, Alvarez & Marsal

“My feeling is this is not the end of the process,” says Asad Ahmed, head of Middle East financial services at global professional services firm Alvarez & Marsal (A&M).