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Middle East Banks Pair Up To Weather Oil’s Plunge and Covid-19

Dubai- Masaader News

The global pandemic and an oil price rout are prompting a new wave of consolidation talk among banks in the Middle East, according to Bloomberg

In recent weeks, two potential tie-ups in Saudi Arabia and Qatar have been announced, adding momentum to an already unprecedented merger and acquisition spree. With about $440 billion of deals on the table, here’s what’s in the works:

National Commercial Bank and Samba

Saudi Arabia’s largest lender by assets last month said it plans to pay as much as $15.6 billion to acquire rival Samba Financial Group in what could be the world’s biggest banking takeover this year. The potential deal, which would create the region’s third-largest lender, comes about six months after NCB abandoned plans to merge with Riyad Bank
Combined entity: About $210 billion

Masraf Al Rayan and Al Khalij Commercial Bank

Masraf Al Rayan and Al Khalij Commercial Bank entered initial negotiations in June to create an Islamic entity. Barwa Bank and International Bank of Qatar merged in 2018 after a proposed three-way merger with Masraf Al Rayan was abandoned
Combined entity: $45 billion

Oman Arab Bank and Alizz Islamic Bank

Oman Arab Bank agreed in June to acquire local competitor Alizz Islamic as one of the country’s largest investment funds, Omnivest, sold its 12% stake
The agreement marks the culmination of talks that started in 2018 and the combined entity will become a wholly-owned unit of Oman Arab
Combined entity: $8.4 billion

Dubai Islamic Bank and Noor Bank

The United Arab Emirates’ biggest Islamic lender completed a deal in January to buy smaller rival Noor Bank in an all-share deal. The bank has since joined competitors in courting more international investors by raising its foreign ownership cap to 40%
Combined entity: $75.3 billion

Some deals have also fallen victim to the pandemic with a Kuwaiti-Bahrain tie up on hold and a potential acquisition in Egypt halted.

Kuwait Finance House and Ahli United Bank of Bahrain

Kuwait Finance House has postponed its acquisition of Ahli United Bank of Bahrain until December. The transaction, which would have been one of the Middle East’s rare cross-border bank mergers, has been put under review because of the coronavirus. Kuwait’s central bank asked KFH to “conduct a comprehensive reassessment” of its proposed acquisition.
Combined entity: $104 billion

First Abu Dhabi Bank and Bank Audi

Lebanon’s Bank Audi in May mutually agreed to stop the process to sell its Egyptian unit to the Abu Dhabi lender due to the “unprecedented circumstances and uncertain outlook relating to the Covid-19 pandemic”

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