Saudi's National Commercial Bank buys Samba in $14.8B deal

 Saudi Arabia's National Commercial Bank said Sunday it will purchase rival lender Samba Financial Group in a deal valued at $14.8 billion, creating what would become kingdom's largest bank.

bank will control some $223 billion in assets and a market capitalization of $46 billion after merger wins regulatory approvals and is completed, National Commercial Bank said in a filing on Riyh's Tawul stock market anuncing deal.

new bank will control a quarter of all banking in kingdom, it said.

NCB will pay Samba a premium of 3.5% on closing price of its stock Thursday in deal, which will see it dissolve into NCB brand.

bank's largest shareholders will be Saudi Arabia's Private Investment Fund, Public Pension ncy and General Organization for Social Insurance, all government entities.

two banks described merger as fitting into kingdom's Vision 2030 plan, brainchild of Saudi Arabia's assertive Crown Prince Mohammed bin Salman. That plan calls for Saudi Arabia to ween itself off of relying on oil exports while creating new jobs for its millions of young people.

“Saudi Arabia is undergoing a historic transformation with Vision 2030," NCB chairman Saeed al-Ghamdi said in a statement. “Our ambition is to create a national champion that can facilitate transformation envisd under Vision 2030 and create a pioneer for next-generation banking services that nurtures tomorrow’s industry leers."

NCB was Saudi Arabia's first bank to be officially licensed in kingdom back in 1953, created out of two currency tring houses. Samba grew out of Citibank, which established a presence in oil-rich kingdom in 1955. bank became Saudi American Bank following a royal decree in 1980, with Citibank slowly divesting over time until selling its last shares in 2004.

merger h been rumored for months. Ratings ncy Moody’s says it will help NCB become one of world's largest Shariah, or Islamic law, compliant banks alongside fellow Saudi bank Al Rajhi and Kuwait Finance House. It also comes as kingdom grapples with both coronavirus pandemic and oil prices being down to around $40 a barrel amid a global ecomic slowdown.

“A combination of lower oil prices, deteriorating ecomic conditions and fierce competition among banks is driving a new wave of mergers and acquisitions in Saudi Arabia and across wider Gulf region,” Moody's said in September.