A proposed merger of two of Saudi Arabia’s biggest banks, National Commercial Bank (NCB) and Riyadh Bank, has been shelved.
Initial merger discussions took place at the beginning of the year to create a merged entity worth $183 billion in assets, but this appears to be a remote prospect now.
“The boards of directors of both banks agreed to end the initial discussions and discontinue studying the merger of the two banks,” the banks said in statement on Tadawul, the Saudi stock exchange.
Although no official reason has been given for the breakdown in talks, it is believed to be down to a difference in valuation.
Riyadh Bank has enjoyed a strong performance of late, with net profit rising to $1.48 billion in 2019 – a 74% increase since 2016.
This was considerably higher than the 12.6% growth in net profit for NCB during the same period.
Consolidation is currently rife in the Gulf Cooperation Council’s banking sector, but this appears to be one merger that will not take place.
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