Subject category:
Strategy and General Management
Published by:
Amity Research Centers
Length: 12 pages
Data source: Published sources
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Abstract
In October 2020, two major banks of the Kingdom of Saudi Arabia (Saudi Arabia), National Commercial Bank (NCB) and Samba Financial group (Samba) entered into a merger wherein the latter would get about USD15 billion in consideration. It would be the third largest bank by assets in Gulf, 'the national champion for the Kingdom and a regional powerhouse for the Middle East'. The merged entity would have 30% of market share of Saudi Arabia's banking space. NCB-Samba merger would help the kingdom to implement its economic development plan, Vision 2030 which was led by the Crown Prince Mohammed bin Salman. The merger would help in diversifying from the country's oil reliant economy and fund the kingdom's landmark deals and mega projects. However, when the merger took place, the country was dealing with twin shocks of a coronavirus-led economic slowdown and low crude oil prices. On the other hand, Fitch rating agency had given negative ratings for long term prospects for both NCB and Samba. The merged entity was named Saudi National Bank (SNB). In such scenario, would the SNB be able to bail out the stressed oil dependent economy of Saudi Arabia?
Teaching and learning
This item is suitable for undergraduate, postgraduate and executive education courses.Time period
The events covered by this case took place in 2020-21.Geographical setting
Region:
Asia
Country:
Saudi Arabia
Featured companies
National Commercial Bank (NCB)
Employees:
10000+
Type:
Public company
Industry:
Finance
Samba Financial group (Samba)
Employees:
10000+
Type:
Public company
Industry:
Financial services
About
Abstract
In October 2020, two major banks of the Kingdom of Saudi Arabia (Saudi Arabia), National Commercial Bank (NCB) and Samba Financial group (Samba) entered into a merger wherein the latter would get about USD15 billion in consideration. It would be the third largest bank by assets in Gulf, 'the national champion for the Kingdom and a regional powerhouse for the Middle East'. The merged entity would have 30% of market share of Saudi Arabia's banking space. NCB-Samba merger would help the kingdom to implement its economic development plan, Vision 2030 which was led by the Crown Prince Mohammed bin Salman. The merger would help in diversifying from the country's oil reliant economy and fund the kingdom's landmark deals and mega projects. However, when the merger took place, the country was dealing with twin shocks of a coronavirus-led economic slowdown and low crude oil prices. On the other hand, Fitch rating agency had given negative ratings for long term prospects for both NCB and Samba. The merged entity was named Saudi National Bank (SNB). In such scenario, would the SNB be able to bail out the stressed oil dependent economy of Saudi Arabia?
Teaching and learning
This item is suitable for undergraduate, postgraduate and executive education courses.Settings
Time period
The events covered by this case took place in 2020-21.Geographical setting
Region:
Asia
Country:
Saudi Arabia
Featured companies
National Commercial Bank (NCB)
Employees:
10000+
Type:
Public company
Industry:
Finance
Samba Financial group (Samba)
Employees:
10000+
Type:
Public company
Industry:
Financial services