Abu Dhabi said to study more bank mergers after NBAD-FGB deal

Abu Dhabi is studying the prospects of more bank mergers in a bid to boost its financial services industry, Bloomberg reported, citing unnamed sources with knowledge of the matter.

The emirate is currently considering a plan to merge Abu Dhabi Commercial Bank and Union National Bank, and also combine Abu Dhabi Islamic Bank with Al-Hilal Bank, the people said.

The talks come after National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB) announced plans for their merger, which will create the largest bank in the Middle East with $175 billion in assets.

Fresh mergers, if they go through, will happen only after the NBAD-FGB merger is completed by March 2017, the sources added.

No final decision has been taken and Abu Dhabi might not pursue the mergers, they said.

Abu Dhabi Investment Council (ADIC), a sovereign wealth fund in the emirate, owns a 58 percent stake in ADCB and 50 percent of UNB. The fund also holds a 7.6 percent stake in Abu Dhabi Islamic Bank and a holding in Al-Hilal, the news agency reported.

ADCB, which has a market value of about $8.6 billion, has $69 billion in assets, while UNB with a market value of $2.9 billion, has $29 billion in assets.

Earlier, Abu Dhabi also announced plans to combine two of its largest sovereign investment funds International Petroleum Investment Co. and Mubadala Development Company, as well as mergers in industries from oil to education.

As the Abu Dhabi bourse neared closing hours on Wednesday, UNB surged more than 12 percent to AED 4.48, while ADCB rose 6.7 percent at AED 6.05