Abu Dhabi said to mull more bank mergers

Abu Dhabi is considering more mergers to boost its financial services industry after combining National Bank of Abu Dhabi PJSC and First Gulf Bank PJSC, according to four people with knowledge of the matter. Bank stocks surged. Union National Bank shares closed up 12 per cent in Abu Dhabi on Wednesday, posting its biggest gain since November 2015, while ADCB rose 5.8 per cent. ADIB shares rose 4.7 per cent. The broader Abu Dhabi Securities Market General Index rose 2.6 per cent. The emirate is weighing a plan to merge Abu Dhabi Commercial Bank PJSC and Union National Bank PJSC and also combine Abu Dhabi Islamic Bank PJSC with Al-Hilal Bank PJSC, the people said, asking not to be identified as the plans are private. Abu Dhabi is considering further deals only after the NBAD-FGB merger is completed by March 2017, the people said. No final decision has been taken and the emirate may not pursue the mergers, they said. Abu Dhabi decided to combine its two largest banks in July to create a regional powerhouse with $175 billion (over AED 642 billion) of assets. 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. (Dinesh Nair, Stefania Bianchi, Arif Sharif and Archana Narayanan/Bloomberg)

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