SABB-Alawwal merger is turning point for Saudi banking sector: official

The merger of Saudi British Bank (SABB) with Alawwal Bank will be a turning point for the financial sector in Saudi Arabia -- being the first in the sector for 20 years, Alawwal Bank’s Managing Director Søren Nikolajsen told Al Arabiya TV.

Nikolajsen considered the agreed-upon share swap ratio fair for stockholders on either side of the deal.

“I think both sides got a fair share swap price, which should satisfy shareholders. We have been negotiating the merger for 18 months, conducted due diligence, and we are happy with the results,” he said.

The resulting bank would be in line with Saudi government’s target reforms, including expanding the private sector with the support of strong banks.

The new bank will serve all target segments, from retail and SMEs to larger and international firms, he said.

Regarding the shareholding of the Royal Bank of Scotland (RBS), Nikolajsen said: “RBS expressed willingness to preserve its stake in the bank. But that is not a long-term strategic goal for them. We are willing to support in either case.”

When asked about digital banking, he said: "Digitalization is not only the future, it is a battlefield for competitive advantage.

“Alawwal Bank pioneered digital banking. We opened last year an innovative digital branch, and launched last week an innovative customer recognition technology.”

SABB and Alawwal had entered into binding merger agreement, whereby the assets and liabilities of Alawwal will be transferred to SABB, Argaam previously reported.