Two of Abu Dhabi’s largest banks have said they are in talks to merge, potentially sparking further rationalisation in the United Arab Emirates as the oil-rich region weathers the oil price slump.
State-owned National Bank of Abu Dhabi and First Gulf Bank, in which members of the ruling family have a significant interest, would surpass Qatar National Bank to become the region's largest lender.
“Each bank has formed a working group made up of senior executive management to review the commercial potential along with any legal and structural aspects of a merger or combination,” NBAD said on Sunday.
“At this time, there is no certainty that discussions between NBAD and FGB will result in a merger or combination.”
More mergers are expected between Middle Eastern banks if the planned $13 billion tie-up ends with a deal. The idea of merging FGB and NBAD to create a regional powerhouse with $172 billion of assets and $3 billion of net profit has been discussed by their state shareholders for about a month, sources said.
– Copyright The Financial Times Limited 2016
