Why Saudi Banking M&A Awoke From a Two-Decade Slumber - Bloomberg:
"After an almost 20-year drought in mergers and acquisitions among lenders in Saudi Arabia, a new deal may spur activity in the Middle East’s biggest economy. HSBC Holdings Plc affiliate Saudi British Bank, or SABB, is set to take over Alawwal Bank that’s backed by Royal Bank of Scotland Group Plc in a $5 billion stock deal. The merger will reaffirm HSBC’s position in the kingdom and may offer international lenders some insight on how to approach Saudi Arabia, which is opening up to overseas investment, but still blocks foreign control of banks. 1. Why were there no bank mergers for 20 years? Lenders didn’t see a need to consolidate, partly because they have been well-capitalized and profitable, said Hans-Peter Huber, chief investment officer at Riyad Capital. There also aren’t that many of them -- 12 domestic banks and 14 licensed foreign banks, according to the Saudi central bank website, in a country of 32 million people. That’s among the fewest commercial banks per capita in the Gulf, said Aarthi Chandrasekaran, vice president at Shuaa Capital in Dubai."
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