Product details

By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them.
You can change your cookie settings at any time but parts of our site will not function correctly without them.

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

Related