National Commercial Bank (NCB), the largest bank in Saudi Arabia, has negotiated a merger with rival Samba Financial Group. This deal will become the main one in the world in 2020 in terms of the value of assets of organizations, Bloomberg reports.
NCB will pay nearly $15 billion for a 67.4 percent stake in the second bank. After the merger, the capitalization of the financial institution will amount to $46 billion, the total volume of assets will reach 220 billion. The new bank will be the third-largest in the Persian Gulf.
The merger is one of the key points of the Vision 2030 program, which is a plan to get rid of oil dependence. The authors of the initiative expect that the association will bring in more than $200 million annually.
The reallocation of assets is expected to be completed in the first half of 2021. The publication indicates that a year ago, NCB decided to abandon the merger with another competitor вЂ” Riyad Bank. However, the economic situation associated with the coronavirus pandemic and the sharp drop in oil prices changed his attitude towards unification.
Earlier it was reported that Saudi Arabia intends to increase oil production to 13 million barrels per day in the future. After the end of the acute stage of the crisis in the oil market, such a strategy, Riyadh believes, will allow to squeeze out competitors in the market.