December 24, 2018 / 2:09 PM / 9 months ago

Saudi Arabia's biggest bank NCB seeks merger talks with rival Riyad

RIYADH/DUBAI, Dec 24 (Reuters) - Saudi Arabia’s National Commercial Bank (NCB), the kingdom’s biggest lender by assets, has begun preliminary discussions to merge with smaller rival Riyad Bank, the two lenders said on Monday.

A merger would further extend NCB’s lead over its closest rivals including Al Rajhi Bank, by boosting its assets by almost a third to 685 billion riyals ($183 billion)

The move comes two months after Saudi British Bank (SABB) and smaller rival Alawwal Bank agreed on a binding deal to create Saudi Arabia’s third-biggest lender in the first major tie-up for the country’s banking sector.

NCB said any agreement would be subject to regulatory and shareholders approvals.

A wave of bank mergers are taking place in the Gulf region, after two of the United Arab Emirates’ biggest banks linked up to create First Abu Dhabi Bank last year

Consolidation has increased in the past two years as profit margins have been squeezed by lower government and consumer spending in the face of weak oil prices.

$1 = 3.7516 riyals Reporting by Marwa Rashad and Hadeel Al Sayegh; Editing by Mark Potter

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