What would be the size of NCB-Samba new merged entity?

National Commercial Bank (NCB), Saudi Arabia’s biggest lender by assets, signed a framework agreement with Samba Financial Group, the Kingdom’s fifth largest lender, on June 25 to begin due diligence process, and negotiate definitive and binding terms of a potential merger.

The merger would create the largest bank in Saudi Arabia with assets of up to SAR 802 billion ($214 billion).

It would also create the Gulf's third largest bank by assets, and the second largest bank in terms of loan and deposits portfolio. The current capital of the new entity would be the largest in the region.

NCB and Samba’s combined market capitalization, based on closing prices on Thursday, June 27, stood at SAR 159 billion ($42.5 billion), creating the fourth largest bank by market value in Saudi Arabia.

*Total capital based on exchange ratio range (Samba shareholders will receive between 0.736 and 0.787 newly issued share of NCB in exchange for every share held)

According to Argaam’s date, the new entity would be the Gulf's third largest bank by assets, after Qatar National Bank and the UAE's First Abu Dhabi Bank. The merged entity will have $213.9 billion assets.

The GCC region’s top 15 lenders will include six players from Saudi Arabia, five from the UAE, and two from Kuwait and Qatar each.

*December 2015 data

In terms of total deposits, the new entity will be the second largest bank in the Gulf region with $147.5 billion worth of deposits after QNB, which has $194 billion deposits.

In terms of total loans, the new entity will be the second largest bank in the Gulf region with $120.8 billion loans after QNB.

Meanwhile, the new entity will top the GCC peers in terms of capital with nearly $12 billion. The list includes ten Saudi banks.

In December 2019, the board of directors of NCB and Riyad Bank agreed to back out of their merger negotiations, which started end of 2018.

According to Argaam calculations, the potential merger between NCB and Samba would be the second after the consolidation of SABB and Alawwal Bank.

The Public Investment Fund (PIF), the Public Pension Agency (PPA) and the General Organization for Social Insurance (GOSI) own various stakes in NCB and Samba.