Saudi National Bank

The Saudi National Bank is the largest financial institution in the Kingdom of Saudi Arabia. It formally launched on 1 April 2021, following the completion of the merger of the National Commercial Bank and Samba Financial Group, becoming a unified banking entity listed on the Saudi Exchange (Tadawul). At the time of the merger its market share reached about 30% across all economic indicators, its assets exceeded SAR 896 billion, and it held an equity base of SAR 127 billion with a consolidated net profit of SAR 15.6 billion. [1]

On 9 February 2021, the Capital Market Authority announced its approval of the National Commercial Bank's request to increase its capital from SAR 30,000,000,000 to SAR 44,780,000,000 by issuing 1,478,000,000 ordinary shares, in order to merge Samba Financial Group into the National Commercial Bank and transfer all of the group's assets and liabilities to it through a securities swap offer. [2]

A swap ratio of 0.739 ordinary National Commercial Bank shares was set for each ordinary share of Samba Financial Group. At the extraordinary general assembly meetings of both banks on 1 March 2021, shareholders voted by a large majority in favour of the merger, after the completion of the required regulatory approvals, including the non-objection of the Saudi Central Bank, the non-objection of the General Authority for Competition, the approval of the Capital Market Authority and the approval of the Saudi Exchange (Tadawul). [3]

On 1 April 2021, the completion of the merger was formally announced under the name "Saudi National Bank", and the unified entity began trading as a company listed on the Saudi Exchange, while the listing of Samba Financial Group's shares was cancelled and all of its assets, debts and operations were transferred to the Saudi National Bank. [1]

The public subscription for 25% of the National Commercial Bank's shares began on 19 October 2014 and ran for two weeks, ending on 9 Muharram 1436 AH, corresponding to 2 November 2014, at 500 million shares out of a total of two billion shares and a price of SAR 45 per share. It was the largest initial public offering the Saudi market had seen at the time, and with it the bank completed the list of the twelve listed local banks. [4]

The Saudi Exchange (Tadawul) and the National Commercial Bank celebrated the listing of the bank's share within the banking and financial services sector on 12 November 2014. It was the fifth listing in the Gregorian year at the time, raising the number of companies listed in the banking sector to 12 and the total number of companies listed on the market to 168. [5]

The bank announced its first results after the merger for the first half of 2021, with net profit after zakat and income tax attributable to its shareholders rising to SAR 5.526 billion, compared with SAR 4.922 billion in the corresponding period of the previous year, an increase of SAR 604 million and growth of 12.3%. [6]

The bank's total assets reached SAR 896 billion, compared with SAR 557 billion at the end of the corresponding period, and total shareholders' equity excluding minority interests amounted to SAR 159 billion, compared with SAR 73 billion, an increase of 120%. The finance and loan portfolio rose to SAR 503 billion, compared with SAR 316 billion, and customer deposits to SAR 588 billion, compared with SAR 380 billion. [6]

On 15 July 2015, the National Commercial Bank successfully completed the issue of Tier 1 subordinated sukuk compliant with the provisions of Islamic Sharia, through a private placement within the Kingdom of Saudi Arabia worth SAR 2 billion. Such issues are among the requirements of Basel 3 to strengthen the capital base, improve the maturity profile of liabilities and diversify funding sources, and their management was assigned to AlAhli Financial Company. [7]

In November 2022, the Saudi National Bank invested SAR 5.5 billion, equivalent to 9.88%, in Credit Suisse Group as part of its participation in the group's capital increase. It stated that this stake represented less than 0.5% of its total assets and 1.7% of its investment portfolio as of December 2022, that the impact on its capital adequacy ratio from the decline in market value was about 15 basis points, and that its assets exceeded SAR 945 billion. [8]

The Saudi Export-Import Bank signed a term sheet with the Saudi National Bank to finance Saudi exports on the sidelines of the Biban 23 forum in Riyadh, strengthening support for Saudi exporters and non-oil export activity. The bank was represented at the signing by the head of the international trade group, Nasser Sulaiman Al-Furaih. [9]

The Fund for Martyrs, the Injured, Prisoners and the Missing signed a cooperation agreement with the Saudi National Bank in the presence of the Governor of the Saudi Central Bank. It provides for the bank to allocate 100 housing units to the fund's beneficiaries within the AlAhli Housing Programme, in partnership with the Ministry of Municipalities and Housing, and to support an English language education and training programme for 500 beneficiaries and an economic and financial awareness programme for 800 beneficiaries. [10]

Within the framework of the "Ahalina" social responsibility programme, the Social Development Bank signed a cooperation agreement with the Saudi National Bank to establish a financing portfolio worth SAR 10 million to finance entrepreneurs and start-ups, to be managed by the Social Development Bank on a sustainable basis. [11]

The Financial Academy and the Saudi National Bank signed a cooperation agreement to develop human capabilities in the financial sector in support of the goals of Saudi Vision 2030. The agreement includes the implementation of 100 training programmes, covering specialist, leadership and professional certification programmes, as well as in-person and virtual workshops, targeting the training of more than 4,000 male and female trainees from the bank's staff. [12]

The Real Estate Development Fund signed a partnership agreement with the Saudi National Bank to provide financing and housing services to beneficiaries of the "Sakani" programme at the fund's branches across the regions of the Kingdom. It was the fund's fourth agreement with financing institutions, within the goals of the housing programme to reach a home-ownership rate of 70% by 2030. [13]

The Saudi National Bank launched a financing initiative called "Green Financing", through which it provided facilities worth SAR 1 billion that enabled the Saudi Investment Recycling Company (SIRC) to acquire one of the largest companies treating solid, liquid and gaseous industrial waste, as part of efforts to promote the circular economy and the Saudi Green Initiative. [14]

Q: When was the Saudi National Bank launched and what is its origin? A: It formally launched on 1 April 2021, following the completion of the merger of the National Commercial Bank and Samba Financial Group under the name Saudi National Bank.

Q: How large is the Saudi National Bank in the Saudi banking market? A: At the merger its market share reached about 30% and its assets exceeded SAR 896 billion, making it the largest financial institution in the Kingdom.

Q: How did the bank's share become traded on the market? A: 25% of the National Commercial Bank's shares were offered for public subscription on 19 October 2014, and the share was listed on the Saudi Exchange (Tadawul) on 12 November 2014; the unified entity now operates as a company listed on Tadawul.

Q: What are the most prominent aspects of its social and developmental role? A: It takes part in housing and real-estate financing programmes, supports the Fund for Martyrs, the Injured, Prisoners and the Missing, finances entrepreneurs through the "Ahalina" portfolio, and trains its staff in partnership with the Financial Academy.

Q: Does the bank have Sharia-compliant capital instruments? A: It completed the issue of Tier 1 subordinated sukuk compliant with the provisions of Islamic Sharia worth SAR 2 billion, within the requirements of Basel 3.

The Saudi National Bank is the largest financial institution in the Kingdom of Saudi Arabia. It launched as a unified entity in 2021, and its role forms part of the development paths linked to Saudi Vision 2030. [1] Related topics on the platform include the Public Investment Fund, alongside the role of the Saudi Central Bank and the Saudi Exchange in the financial sector.