New M&A wave seen for Gulf banks trying to outrun virus slowdown
Published 02 Jul,2020 via Bloomberg Tech - The coronavirus-induced economic slowdown is prompting a new wave of consolidation talk among banks in the Persian Gulf.
In less than a week, two potential tie-ups have been announced, adding momentum to an already unprecedented merger and acquisition spree. Saudi Arabia’s biggest lender National Commercial Bank kicked off the most recent wave with an offer to buy rival Samba Financial Group in what could be the world’s biggest banking takeover this year. Days later, two Qatari lenders said they’d started initial talks to combine.
“Banks are struggling to deliver top-line growth in an environment where low oil prices are crimping public spending and denting private-sector confidence, and where low interest rates are keeping margins in check,” said Rahul Shah, the Dubai-based head of financials equity research at Tellimer Ltd. The Saudi deal is also being driven the desire to create a regional champion and other lenders “may be forced to respond.”
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Archana Narayanan