JEDDAH: National Commercial Bank (NCB), Saudi Arabia’s largest bank by assets, is looking to expand abroad by buying controlling stakes in banks in major Middle East economies, its top executive said. State-owned NCB made its first major foray abroad last year by buying a 60 percent stake in Turkish Islamic lender Turkiye Finans for $1.08 billion.
“We have plans to expand in the region either through acquisitions or through greenfield investments to become the premier financial service group in the region,” Abdulkarim Abu Al-Nasr told Reuters in an interview. “Turkey was the first acquisition and we will continue to look for opportunities in the region,” he added.
Investments such as the one in Turkey will be made on a deal-by-deal basis and NCB will seek controlling interests in the targeted banks, said Abu Al-Nasr.
NCB is looking at the Middle East and North African region as a primary market and has prioritized the countries which have large economies and in which the bank can make a “significant difference”, Abu Al-Nasr said. “Today, as the Kingdom opens up and as the region integrates there is no doubt that there is a need for regional financial powerhouses which can serve and compete on a regional basis, not only on a domestic basis,” he said. NCB was eclipsed as the Gulf Arab region’s largest bank by assets in 2007 by the creation of Emirates NBD, which Dubai created by combining two of its banks.
NCB has been slated for privatization through an initial public offering for years. Abu Al-Nasr declined to say when any sale would take place, saying the decision rests with the government.
He said NCB’s level of exposure to the current global financial crisis was not direct and the effects were minimal.
“It is not very large in the sense that it would derail our earning targets this year or affect our capital position,” he said, adding that NCB’s exposure to Lehman Brothers, which has filed for bankruptcy, was less than $5 million.
