RBS says Saudi bank merger will aid focus on 'key' markets
By Duncan Ferris
Date: Monday 17 Jun 2019
(Sharecast News) - Royal Bank of Scotland said on Monday that the completion of the merger between Saudi British Bank and Alawwal bank would result in shedding £4.7bn of risk weighted assets and boost its core capital.
The bank said the merger's completion meant it would recognise an income gain on disposal of the Alawwal bank stake for shares received in Saudi British Bank of £400m and added that the deal would extinguish legacy liabilities of £300m.
Chief executive Ross McEwan said: "We are pleased that this merger has now concluded; it will help facilitate the future exit of our shareholding as we continue to focus on our key target markets. The release of capital will also have a positive and material financial impact for RBS."
The UK retail banking giant had held a 15.3% interest in Alawwal bank through its Dutch subsidiary, Natwest Markets N.V., which held an aggregate 40% shareholding on behalf of itself, Stichting Administratiekantoor Beheer Financiële Instellingen and Banco Santander, due to a consortium arrangement between the three parties.
However, the 10.3% interest in Saudi British Bank acquired by NWM NV as a result of the new merger has immediately been transferred to the separate consortium members as part of an unwinding of the group's arrangements.
RBS' economic interest of 4.1% has been transferred to Natwest Markets.
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