The National Commercial bank (NCB) and Samba financial group (Samba), the two major banks in Saudi Arabia, have decided to merge. As a part of the merger process, the two company heads signed a bilateral agreement with respect to an asset of 837 billion riyals ($223 billion).
The merger will make the NCB the third biggest banking institution in the Arab world, and the foremost bank in terms of net profit. It will also become a leading bank in the Gulf region with 171 billion riyals ($46 billion) in market capitalization. Moreover, it will be the largest bank in Saudi Arabia, rendering about 25 per cent of the retail and wholesale banking market services.
Upon completion of the process, Samba's shares will be transferred to NCB, and new shares will be issued. Thus, Samba shareholders will receive 0.739 NCB share value per share, and all assets and liabilities of Samba will be transferred into NCB.
According to the agreement, NCB headquarters will be shifted from Jeddah to Riyadh, and the chairman of the Samba Group, Ammar Al Khudairy, will be appointed the CEO of NCB. The present NCB chairman, Saeed Al Ghamdi, will be the managing director of the new NCB.
The agreement stipulates appointing a special consulting firm to study the matters related to the exact name, logo, and identity of the new bank.