Riyadh – Mubasher: Saudi-listed Alawwal Bank has selected JPMorgan to advise it on a possible merger with Saudi British Bank (SABB), sources familiar with the matter told Reuters on Monday.
On Sunday, senior management from the two Saudi-based banks were in talks with their advisers regarding the proposed merger and the timeframe for its completion, one of the sources said.
SABB has appointed another adviser for the transaction, the sources added but did not disclose the name of the adviser.
Last month, the two banks said that they had agreed to commence talks on a merger that could create Saudi Arabia’s third-biggest bank with assets of nearly $80 billion.
Alawwal Bank is 40%-owned by the Royal Bank of Scotland (RBS), which has for several years been trying to sell the stake as it withdraws from international operations.
Meanwhile, HSBC Holdings owns 40% of SABB, the kingdom's sixth-largest bank by assets.
Saudi Arabia has a total of 12 local commercial banks operating there. Mergers and acquisitions are considered rare in the kingdom, according to Reuters.
A timeframe for the merger has not yet been determined.
The accounts of the two banks could be consolidated by the end of the year; however, the merger would take longer, one of the sources said.
In March, Reuters also reported, quoting sources, that France’s Credit Agricole had selected JPMorgan to advise it on the potential sale of its 31% stake in Banque Saudi Fransi (BSF). The sale is estimated at around $2.4 billion.
