Saudi Arabia’s biggest bank NCB in merger talks with rival Riyad

Saudi investors monitor stocks at the exchange market department at the National Commercial Bank (NCB) in Riyadh. (File photo/AFP)
Updated 24 December 2018
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Saudi Arabia’s biggest bank NCB in merger talks with rival Riyad

RIYADH/DUBAI: Saudi Arabia’s National Commercial Bank (NCB), the Kingdom’s biggest lender by assets, has begun preliminary discussions to merge with smaller rival Riyad Bank, the two lenders said on Monday.
A merger would further extend NCB’s lead over its closest rivals including Al-Rajhi Bank, by boosting its assets by almost a third to 685 billion riyals ($183 billion)
The move comes two months after Saudi British Bank (SABB) and smaller rival Alawwal Bank agreed a binding deal to create Saudi Arabia’s third-biggest lender in the first major tie-up for the country’s banking sector in recent times.
NCB said any agreement would be subject to regulatory and shareholder approvals, and there would be no forced job losses.
Both banks have a common shareholder in sovereign fund Public Investment Fund (PIF), which could make the merger easier, said Mazen Al-Sudairi, head of research at Al-Rajhi Capital.
PIF owns 44 percent of NCB and 22 percent of Riyad Bank, according to Thomson Reuters data.
“They also have similar exposure to retail and corporate sectors. This will create synergy and efficiency,” Al-Sudairi said.
Analysts said Riyad could benefit from NCB’s strong balance sheet given it has a high loan to deposit ratio, while NCB could use Riyad’s expertise in growing its long-term deposits.
A wave of bank mergers are taking place in the Gulf region, after two of the United Arab Emirates’ biggest banks linked up to create First Abu Dhabi Bank last year
Consolidation has increased in the past two years as profit margins have been squeezed by lower government and consumer spending in the face of weak oil prices.
However unlike the UAE, which has 50 banks, Saudi Arabia has only 12 commercial lenders, which will be reduced to 11 after the completion of merger between SABB and Alawwal.


Germany’s Mercedes-Benz plans assembly plant in Egypt

Updated 17 min 34 sec ago
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Germany’s Mercedes-Benz plans assembly plant in Egypt

BERLIN: German automaker Daimler’s Mercedes-Benz Cars unit says it is developing plans to open an assembly plant in Egypt.
Mercedes-Benz said in a statement Friday that the passenger car plant would be built by a local business partner and the project is being developed “in close collaboration” with Egypt’s government. It said board member Markus Schaefer recently held “successful discussions” with Egypt’s president and prime minister.
Schaefer described Egypt as “an attractive and competitive location for production and supporting logistics” and said having an assembly plant there would enable Mercedes-Benz to expand its market position.
The company said it is also offering expertise on modern mobility concepts, electric cars and autonomous driving as Egypt develops a new capital and other infrastructure projects, but detailed agreements haven’t yet been reached on that.