Major Abu Dhabi lenders merge to create UAE’s largest bank
Two major lenders in the United Arab Emirates, the First Gulf Bank and the National Bank of Abu Dhabi, have completed a merger to become the largest bank in the country under the name First Abu Dhabi Bank.
The new bank has total assets of $180 billion and capital of nearly $3 billion, making it also one of the largest banks in the Middle East. The First Abu Dhabi Bank began trading yesterday on the Abu Dhabi Securities Exchange under the symbol “NBAD.”
The plan for a merger was first announced in July. The merger takes place as Abu Dhabi, the seat of the UAE’s federal government and home to more than 90 percent of the country’s oil reserves, grapples with lower oil prices.
The merger was seen as a precursor to more deals in the United Arab Emirates’ financial services industry, where about 50 lenders compete in a market of about 9 million people. The emirate has also announced plans to combine two of its largest sovereign investment funds International Petroleum Investment Co. and Mubadala Development Company PJSC, as well as mergers in industries from oil to education.
The deal between NBAD and FGB marks the country’s first major bankingindustry merger since National Bank of Dubai and Emirates Bank International combined to create Emirates NBD PJSC in 2007. Shayne Nelson, the bank’s chief executive officer, has called for further consolidation, saying too many banks are serving a relatively small population.
Abu Dhabi Investment Council, a sovereign wealth fund in the emirate, owns a 58 percent stake in ADCB and 50 percent of UNB, according to reports. The fund also holds a 7.6 percent stake in Abu Dhabi Islamic Bank and a holding in Al-Hilal. —Agencies