Saudi Arabia’s National Commercial Bank (NCB) has abandoned its plans to merge operations with local peer Riyad Bank.

In a stock exchange filing, NCB said that it has ended preliminary merger talks with Riyad Bank. However, it did not specify any reason for the collapse, Reuters reported citing the NCB statement.

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Riyad Bank also confirmed the move through a separate filing.

NCB-Riyad Bank merger: Background

In January, NCB began initial discussions to combine its business with Riyad Bank. The combination, if advanced, would have created one of the largest lenders in the Middle Eastern region with more than $182bn in assets.

At the time of the announcement, NCB promised that the merger will not result in any redundancies.

Saudi Arabia’s sovereign wealth fund Public Investment Fund (PIF) is a common shareholder in both the lenders. PIF owns 44.2% stake in NCB and holds 21.7% of Riyad Bank.

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General Organization of Social Insurance (GOSI) is also a common shareholder owning 5.2% and 16.7% respectively in the two banks.

NCB and Riyad Bank entered merger talks amid several such consolidations in the Middle-East. Recently, the number of banking combinations picked up in the region due to shrinking profits and fluctuating oil prices.

In June this year, Saudi British Bank (SABB) and Alawwal bank finalised their combination. The $71bn merged entity is the third largest in the kingdom by asset strength.

Abu Dhabi Commercial Bank, Union National Bank and Al Hilal Bank also merged their operations this year.

Dubai Islamic Bank (DIB), another UAE-based lender, is in process to acquire Noor Bank.