Royal Bank of Scotland Group (RBS) said the merger of Alawwal Bank and Saudi British Bank (SABB) would release capital that will have a positive and material financial impact on the Edinburgh-based lender.
Ross McEwan, RBS Chief Executive Officer, said that the merger will facilitate the exit of RBS’s shareholding in Alawwal, as the bank continues to focus on its key markets.
The deal affects RBS and its NatWest Markets and NatWest Markets units, McEwan said.
RBS had for years been trying unsuccessfully to sell its stake in Alawwal. The lender has been cutting investment-banking operations around the world to focus on consumer and commercial lending in the wake of its UK government bailout.
Saudi Arabia’s banking landscape is changing with lenders exploring mergers. The Kingdom’s biggest lender, National Commercial Bank (NCB) announced in December that it has started merger talks with Riyad Bank.
Similarly, Abdulmohsen Al-Fares, the Chief Executive Officer of Alinma Bank said that the lender is open to a merger if a deal adds value for shareholders.
Source Islamic Business&Finance