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More bank mergers and digital lenders are the order of the day in Saudi Arabia, as the Kingdom seeks to transform itself into a developed financial economy by 2030.
In October, a $15 billion merger brought together National Commercial Bank (NCB), the country’s largest lender by assets, with local rival Samba Financial Group.
The new organization, renamed Saudi National Bank (SNB) on April 1 and headed by chief executive Saeed Al-Ghamdi, is the Kingdom’s largest bank by assets and market capitalization.
It posted a net profit of SR2.07 billion ($552 million) in 2020, down 32% on an annualized basis in a Covid-impaired year.
Analysts and bankers tip the move to usher in a long-awaited cycle of consolidation in a big, but for too long, sleepy and overbanked market.
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“My feeling is this is not the end of the process,” says Asad Ahmed, head of Middle East financial services at global professional services firm Alvarez & Marsal (A&M). “We are likely to see more mergers.”
That would seem to be inevitable and even desirable, rather than just likely.
For one thing, Saudi Arabia is overbanked.