JEDDAH, DUBAI: It took only 15 months for National Commercial Bank and Samba Financial Group to complete the fastest and largest merger in Middle Eastern banking history.
The new entity, Saudi National Bank, also known as SNB, is now the largest financial institution in Saudi Arabia, bringing many benefits to shareholders at the same time.
This can be found in the 10.7% increase in SNB profit for 2021, as the lender reported a profit of SR12.7 billion ($3.4 billion) due to “the improved performance from a series of post-merger effects,” according to one exchange. deposit.
However, such a merger has left few former retail customers struggling to navigate the new system, Arab New has learned.
The bank transferred more than 1.4 million retail customer accounts in less than six months.
“Needless to say, the process was not easy and we faced many challenges, especially as we are talking about the merger of two giant banking entities,” SNB told Arab News.
Integrating the two banks was the “most difficult phase” of the merger, he added, “due to the technical, financial, administrative and indicative procedures required”.
Saudi students like Basel Al-Ameel could not access their student accounts where the government pays a monthly stipend to help them complete their studies.
“On December 28, I tried to withdraw the allowance from an ATM, and it failed. On the same day, 2 of my friends at university tried and it failed,” he said. at Arab News.
“One of them went to about three ATMs to try and withdraw. The next day my second friend was able to withdraw, but I still wasn’t able to. I went for three days to different types of ATMs. Eventually I had to talk to the university bank to resolve the issue,” he added.
Al-Ameel faced another problem where his card was suddenly rejected.
“My SNB card was suddenly rejected, and it had some money in it, and the problem happened to a number of people I know personally,” he said.
The bank responded immediately to resolve the issue.
“When I called the bank, they said the problem would be solved the next day and it was,” he said.
There were other complaints Arab News learned from customers, including the significant time it takes them to get cards in the mail or the difficulty of getting them if the customer is overseas.
These issues were expected, especially in a merger of this magnitude.
The SNB merger started on October 11, 2020 with the signing of a binding framework agreement between the two banks. It was until December 31, 2021 that the transfer of customer accounts had been carried out.
The merger comprised five areas with retail, corporate and treasury at its core.
This also included the merger of NCB Capital and Samba Capital, as well as other administrative sectors and branches such as human resources, procurement and financial management systems. The branches of the two banks were also merged to provide integrated services to customers.
The business sector now has more than 11,000 customers, including many small and medium-sized enterprises. SNB has also completed opening and activating accounts for 100% of business class customers.
SNB Chairman Ammar Al-Khudairy said the Bank has completed all phases of the merger roadmap, culminating in the creation of the largest banking entity in the Kingdom, with assets exceeding $900 billion. SR.
“Reaching the finish line of the merger program paves the way for a new stage of work and a promising future for the Saudi banking sector,” he said.
In January this year, the bank held a market share of 31% of the total assets of the Saudi banking sector; a market share of up to 28% in retail financing and 24% in corporate financing.
“We now have over 500 branches, over 4,100 ATMs across the Kingdom, 950 cash deposit devices and around 127,000 point-of-sale devices,” Al-Khudairy said.
A Saudi woman who preferred to share only her initials, AS, was unable to use her credit card while traveling in Spain on December 31.
“My card was declined because I was booking a hotel room. There is money in my account, I just couldn’t access it,” she told Arab News.
She pointed out that the bank responded very well to her problem and acted immediately.
“I called them that day and told them that my credit card was not working and that I was outside the Kingdom. They were very responsive and helpful and I was able to use my card later for my travel,” she added.
The bank said there was “a great team in the front rows and the back rows” that worked intensively on the merger, which it described as a turning point in Saudi banking history.
Al-Khudairy said the bank has entered a new phase focused on pursuing new strategic aspirations.