Major Abu Dhabi banks in US$29bn merger

Abu Dhabi’s two largest banks have agreed a merger that is seen as creating the region’s largest banking institution. 

The merger of  the National Bank of Abu Dhabi and First Gulf Bank is being seen by market commentators as also resulting in a new global banking power, with a combined market capitalisation of US$29bn, and a network of offices stretching across 19 countries, including the UK, US and Asia.

The merger, which is being executed as a share swap by the two Abu Dhabi-listed entities, is expected to complete by the first quarter of next year, according to a joint statement issued by the banks. The combined entity is to be known as the National Bank of Abu Dhabi, or NBAD.

FGB will be delisted from the Abu Dhabi Securities Exchange on the effective date of the merger, the banks said. “Following the issue of new NBAD shares, FGB shareholders will own approximately 52% of the combined bank and NBAD shareholders will own approximately 48%. The Government of Abu Dhabi and related entities will own approximately 37%.”

The news of the merger comes as Abu Dhabi’s new international financial services free zone, the Abu Dhabi Global Market, pictured, is open for business, after having been established by federal decree in 2013. It is located on Al Maryah Island, which is also home to NBAD’s new headquarters, as well as a number of newly-built hotels, office buildings, hospitals, luxury retail facilities and high-end residences.

It also comes as oil-rich Abu Dhabi, like Saudi Arabia and other jurisdictions dependent on the price of oil, is seeking to boost its non-oil-dependent economic sectors.

NBAD was founded in 1968, and has had a presence in London since 1977, according to its website.

Among its strategic focuses recently have been catering to what it calls “the West-East Corridor” of global trade and investment, which it regards Abu Dhabi as being “located in the centre of”, and along which it foresees “the new mega-cities of the world…[being] concentrated”; and catering to HNW individuals from the Gulf, with private banking services via a network that includes a “wholly owned yet independent Swiss private bank (NBAD Private Bank (Suisse) SA)”, which, it notes, “is fully subject to Swiss laws, rules and regulations”.

In 2013, it launched what was said to be the first pension scheme ever offered to expatriates by a UAE bank, through its Jersey subsidiary, NBAD Trust Co (Jersey).

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