By: Mahmoud Gamal
Abu Dhabi – Mubasher: The UAE banking sector has been witnessing some changes since the beginning of this year due to mergers and formations of new combined entities capable of coping with crises.
One of the mergers is that of National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB), which resulted in the formation of a new entity named First Abu Dhabi Bank with total assets in excess of AED 670 billion ($180 billion).
The NBAD-FGB merger will pave the way for further several mergers in the coming year amid increased competition in the sectors.
Integration and consolidation of business operations and acquisitions in the banking sector will result in the creation of strong high-efficient banking entities, which will contribute to funding development projects beneficial to the economy, analysts told Mubasher.
Arqaam Capital previously expected a possible merger between Abu Dhabi Commercial Bank (ADCB) and Union National Bank (UNB).
Mergers and acquisitions contribute to strengthening the financial and competitive position of listed companies, economist Nasser Al Saeed told Mubasher, adding that these transactions help companies reduce costs and operational risks.
These mergers and acquisitions were expected to happen many years ago, with expectations to continue until 2020, Al Saeed noted.
Mergers will strengthen banks to meet global standards like the Basel III accord which is expected to be fully implemented by 2019, financial expert Wadah Al Taha told Mubasher.
The UAE is considered the most attractive market for mergers and acquisitions in the banking, energy, and technological sectors.
“The start of share trading on First Abu Dhabi Bank is expected to attract more investors to the Abu Dhabi bourse and reflect positively on overall trading,” according to Rashed Al Balooshi, CEO of Abu Dhabi Securities Exchange (ADX).
Translated by: Julian Nabil
