Saudi Arabia’s National Commercial Bank (NCB) and Samba Financial Group are in talks to create a combined entity with almost $214 billion in assets, two sources familiar with the matter told Reuters.
Low oil prices and weak economic growth are pushing bank consolidation across the Gulf and if completed the merger would create one of the region’s largest lenders by assets, ranking third after Qatar National Bank (QNB) and UAE’s First Abu Dhabi Bank, Refinitiv data shows.
Saudi stock exchange Tadawul said on Thursday it was suspending trading in NCB and Samba shares until June 28 at the request of the banks, ahead of them announcing a material event.
NCB is Saudi Arabia’s largest bank by assets and has a market value of nearly $30 billion, more than double that of Samba, which valued at $12.3 billion.
NCB and Samba were not immediately available for comment.
Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF) is a major investor in both banks, with a stake of 44.29 percent in NCB and 22.91 percent in Samba.
NCB and Riyad Bank had ended merger talks last year, without giving a reason.
In 2018, Saudi British Bank (SABB) and smaller rival Alawwal Bank agreed to merge in the first major tie-up for the country’s banking sector in recent times.
The move came as a wave of bank mergers swept the Gulf region, starting with a combination of United Arab Emirates’ biggest banks that created First Abu Dhabi Bank in 2017.