{"id":54152,"date":"2020-07-13T08:26:18","date_gmt":"2020-07-13T13:26:18","guid":{"rendered":"https:\/\/olduvai.ca\/?p=54152"},"modified":"2020-07-13T08:26:23","modified_gmt":"2020-07-13T13:26:23","slug":"oil-price-crash-sparks-a-wave-of-banking-mergers-in-the-middle-east","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=54152","title":{"rendered":"Oil Price Crash Sparks A Wave Of Banking Mergers In The Middle East"},"content":{"rendered":"\n

Oil Price Crash Sparks A Wave Of Banking Mergers In The Middle East<\/a><\/h3>\n\n\n\n

The historic oil price crash and Covid-19 pandemic have left major producers of the commodity in a deep economic crisis. Dramatic production cuts by OPEC+ has exacerbated the situation by further lowering export inflows for economies that depend heavily on oil dollars. Some, such as the UAE, have tried to put on a brave face by touting the strength of their banking systems and claiming they can withstand <\/a>shocks of any scale.<\/p>\n\n\n\n

Unfortunately, a growing body of evidence suggests pretty much the opposite: A wave of banking mergers is sweeping through the Middle East as the sector scrambles to stay afloat amid slowing economic growth.<\/p>\n\n\n\n

About $440 billion worth of deals are already on the table. That\u2019s a remarkable feat for a region that has the lowest banking penetration<\/a> anywhere on the globe. <\/p>\n\n\n\n

Interestingly, Saudi Arabia–guilty of initiating the oil price war with Russia that triggered the oil price crash–is well represented in the growing trend.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

Source: World Bank<\/em><\/p>\n\n\n\n

Giant mergers<\/strong><\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

Source: Bloomberg<\/em><\/p>\n\n\n\n

#1 Saudi Arabia<\/strong> The National Commercial Bank, Saudi Arabia\u2019s largest lender by assets, has lined up a $15.6 billion takeover bid<\/a> for rival Samba Financial Group. The $15.6B tab represents a nearly 30% premium to Samba\u2019s valuation before the deal was announced, while the potential deal will create a $210 billion (assets) behemoth.<\/p>\n\n\n\n

The Saudi Arabian Monetary Authority, the Kingdom\u2019s central bank, has unveiled nearly $27 billion in stimulus packages to support its flagging banking system suffering from years of weak private sector loan growth. The Kingdom\u2019s oil and gas sector accounts for 50% of GDP and 70% of export earnings. The IMF has estimated Saudi Arabia\u2019s\u00a0fiscal breakeven sits at $76.1 per barrel<\/a>, a far cry from the current ~$40\/bbl.<\/p>\n\n\n\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Oil Price Crash Sparks A Wave Of Banking Mergers In The Middle East The historic oil price crash and Covid-19 pandemic have left major producers of the commodity in a deep economic crisis. Dramatic production cuts by OPEC+ has exacerbated the situation by further lowering export inflows for economies that depend heavily on oil dollars. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[23185,30016,522,592,1775,5332],"class_list":["post-54152","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-alex-kimani","tag-banking-mergers","tag-middle-east","tag-oil-price","tag-oil-price-collapse","tag-oilprice-com"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/54152","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=54152"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/54152\/revisions"}],"predecessor-version":[{"id":54153,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/54152\/revisions\/54153"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=54152"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=54152"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=54152"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}