SABB, Alawwal Bank merger may help RBS to sell stake, says S&P

24/05/2018 Argaam

 

The proposed merger between Saudi British Bank (SABB) and Alawwal Bank is likely to help Royal Bank of Scotland Group (RBS) sell its stake in the latter, S&P Global Market Intelligence said in a statement.

 

RBS, which has an effective 40 percent of Alawwal Bank, will have a stake of about 5 percent in the combined entity, potentially making it easier for the British banking group to find a buyer, it added

 

The deal will allow, RBS, which is still majority owned by the British government, to free up capital it holds against the Alawwal stake and it further paves the way for RBS's privatization.

 

SABB will acquire Alawwal in a stock transaction that values the latter at about SAR 18.6 billion and will lead to a combined company with assets of SAR 271.43 billion as of March 31, according to S&P Global Market Intelligence calculations.

 

It is the first merger of two Saudi banks since the creation of Samba Financial Group, which resulted from the union of Saudi American Bank with United Saudi Bank in 1999. Samba had assets of SAR 227.61 billion as of 2017-end, S&P said.

 

Last week, the two banks said that talks on their proposed merger are at an advanced stage with a preliminary share exchange ratio been agreed.

Comments {{getCommentCount()}}

Be the first to comment

loader Train
Sorry: the validity period has ended to comment on this news
Opinions expressed in the comments section do not reflect the views of Argaam. Abusive comments of any kind will be removed. Political or religious commentary will not be tolerated.