By Adam Clark

Royal Bank of Scotland Group PLC (RBS.LN) said Monday that the completed merger of Alawwal Bank (1040.SA) and Saudi British Bank (1060.SA) will boost its capital and eventually facilitate the sale of its interest in the combined lender.

RBS previously held a minority stake in Alawwal, which completed its merger on Sunday with Saudi British Bank to create the third-largest lender in Saudi Arabia.

The U.K. lender now holds a 4.1% interest in the combined Saudi entity. RBS said it will recognize a reduction in risk-weighed assets of 4.7 billion pounds ($5.9 billion) as a result of the merger.

RBS said the merger would increase its Common Equity Tier 1 capital ratio--a key measure of balance-sheet strength--by 60 basis points compared with its position as of March 31.

"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," RBS Chief Executive Ross McEwan said.

Write to Adam Clark at adam.clark@dowjones.com

(END) Dow Jones Newswires

June 17, 2019 02:41 ET (06:41 GMT)

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