Abu Dhabi Commercial Bank (ADCB), Union National Bank (UNB) and Abu Dhabi Islamic Bank (ADIB) have denied media reports on further potential mergers between Abu Dhabi banks.

The Abu Dhabi Exchange fell 1.7 per cent on the news.

Bloomberg reported that the Abu Dhabi authorities were planning to engineer the mergers of ADCB and UNB, and ADIB and the local Al-Hilal Bank to improve efficiency.

National Bank of Abu Dhabi and local First Gulf Bank are aiming to complete their merger in the first quarter of 2017.

The UAE market is widely seen as overbanked, and local banks face high levels of competition.