Saudi bank merger points to trouble in the economy

Growth sector: People wearing face masks are seen outside Samba bank in Riyadh. The financial industry is the linchpin of the kingdom’s transformation plan to wean the economy off oil. — Reuters

LONDON: When Saudi Arabia last saw a merger of two of its biggest banks, the oil price was recovering from a dramatic slump, the kingdom was in the midst of a deep recession and its debt exceeded the size of the economy.

That was in 1999, as Samba Financial Group joined forces with United Saudi Bank to create one of the largest banks in the country. Just over two decades later, Samba is once again at the center of consolidation as a year intended to showcase the progress of the kingdom’s transformation plan turns into one of the most testing in its recent history.