Abu Dhabi is considering combining Abu Dhabi Islamic Bank (ADIB) with First Abu Dhabi Bank (FAB) to create the Gulf region’s largest lender.
The Emirate plans to wait for a three-way combination of Abu Dhabi Commercial Bank (ADCB), Union National Bank (UNB) and Al Hilal Bank to close before starting fresh talks to condense the finance industry further.
The banks have not formally appointed advisers and discussions may not lead to a deal. A merger would create a lender with $236.7 billion in assets.
A representative for FAB said the firm doesn’t comment on market speculation and that following the successful completion of our integration process, the bank is fully focused on unlocking its full potential and maximising shareholder value in 2019.
ADIB, which has a market value of $4.3 billion, in February said that it’s always studying options to strengthen its client base and market value.
Abu Dhabi, home to about six per cent of global oil reserves, is stepping up efforts to create leaner and more competitive banks after a slump in crude prices. FAB was formed by merging National Bank of Abu Dhabi and First Gulf Bank in 2017, and the emirate has also combined three of its sovereign wealth funds.
The consolidation isn’t unique to Abu Dhabi. Lower oil prices have pushed governments across the Gulf Arab region to consolidate their state industries in an attempt to stay competitive. Saudi Aramco last month agreed to buy a majority stake in SABIC from the Kingdom’s sovereign wealth fund for $69.1 billion in a record deal for the region.
Source Islamic Business&Finance