Two of Abu Dhabi’s top banks have agreed on a merger plan that will create a regional powerhouse with US$175 billion in assets.
National Bank of Abu Dhabi (NABD) and First Gulf Bank (FGB) announced that their boards approved a merger via a share-swap.
Under the plan, NBAD will exchange 1.254 of its shares for each FGB share, according to an announcement Sunday.
FGB shareholders will hold 52 percent of the combined entity, which will operate under the National Bank of Abu Dhabi name, Bloomberg News reported.
The merger is expected to deliver cost-savings of about US$136 million annually.
The Abu Dhabi government and related entities will own about 37 percent of the merged entity.
The merger may presage further consolidation in the United Arab Emirates’ financial services industry where about 50 lenders compete in a market of about 9 million people, the report noted.
The new entity will have a market value of about US$29 billion, larger than the likes of Standard Chartered and Deutsche Bank, the Wall Street Journal noted.
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