(Bloomberg) -- National Commercial Bank hired JPMorgan Chase & Co. to advise on its proposed merger with Riyad Bank that would create the Gulf's third-largest lender with $182 billion in assets, people familiar with the matter said.
Saudi Arabia's largest bank decided on the appointment on Thursday, the people said, declining to be identified because the decision hasn't been made public. Riyad Bank is working with Goldman Sachs Group Inc. on the deal, the people said.
National Commercial Bank and Riyad Bank couldn't immediately be reached for comment, while JPMorgan and Goldman Sachs declined to comment.
Read more: Biggest Saudi Arabia Bank Starts Talks to Create Mega Lender
Lenders in the Persian Gulf have been rapidly consolidating as they seek to stay competitive in an era of lower oil prices. Abu Dhabi is working on a merger of three of its banks, potentially the emirate's second in just over a year. About a dozen other regional lenders are also involved in takeover talks.
Read more: Why Gulf Banks Are Merging Like Never Before: QuickTake
The Public Investment Fund, Saudi Arabia's wealth fund that owns stakes in some of the biggest lenders, is weighing which banks could be merged as the kingdom explores potential combinations to boost its financial services industry, people familiar with the matter said in December.
The sovereign wealth fund owns a 44 percent stake in National Commercial Bank and about 22 percent of Riyad Bank. Other government-controlled funds hold stakes in both banks. Goldman Sachs and JPMorgan also advised on the merger of SABB and Alawwal, the first bank combination in the country for about 20 years.
Riyad Bank shares have risen 16 percent since the merger talks were announced in December, while National Commercial Bank is up 11 percent.
--With assistance from Sarah Algethami.
To contact the reporters on this story: Dinesh Nair in London at dnair5@bloomberg.net;Archana Narayanan in Dubai at anarayanan16@bloomberg.net;Matthew Martin in Dubai at mmartin128@bloomberg.net
To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net
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