(Bloomberg) -- Royal Bank of Scotland Group Plc said the merger of Alawwal Bank and Saudi British Bank would release capital that will have a positive and material financial impact on the Edinburgh-based lender.
The merger will facilitate the exit of RBS’s shareholding in Alawwal, as the bank continues to focus on its key markets, RBS Chief Executive Officer Ross McEwan said in an emailed statement on Sunday. The deal affects RBS and its NatWest Markets NV and NatWest Markets Plc units, it said.
RBS had for years been trying unsuccessfully to sell its stake in Alawwal. The lender has been cutting investment-banking operations around the world to focus on consumer and commercial lending in the wake of its U.K. government bailout. RBS is part of a group that owned 40% of Alawwal following the takeover of ABN Amro in 2007.
Saudi Arabia’s banking landscape is changing with lenders exploring mergers. The kingdom’s biggest lender, National Commercial Bank, in December announced the start of talks with Riyad Bank. Alinma Bank would be open to a merger if a deal adds for shareholders, Chief Executive Officer Abdulmohsen Al-Fares said in April.
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