The shareholders of First Gulf Bank (FGB) and National Bank of Abu Dhabi (NBAD) have approved a proposed merger of the two banks, which will create the largest financial institution in the UAE with assets of approximately AED655bn ($178bn).

The approvals were given at separate general assembly meetings held on 7 December. The merger was recommended by the board of directors of both banks on July 3. The approval of at least 75 per cent by value of the shares represented at FGB and NBAD was required to proceed with the merger.

FGB chairman Sheikh Tahnoon bin Zayed al-Nahyan is the chairman designate and NBAD chairman Nasser Ahmed Alsowaidi is the vice chairman designate. Abdulhamid Saeed, who is currently a board member and managing director of FGB, is the Chief Executive Officer designate for the combined bank.

The recommended transaction will involve a share swap, in which FGB shareholders receive 1.254 NBAD shares for each FGB share they hold. Following the issue of new NBAD shares, FGB shareholders will own approximately 52 percent of the combined bank, with NBAD shareholders owning approximately 48 percent.

The Government of Abu Dhabi and Government related entities will own approximately 37 percent of the merged entity.

On the effective date of the merger, FGB shares will be delisted from the Abu Dhabi Securities Exchange (ADX) and the company dissolved.

MEED’s GCC top 50 banks

National Bank of Abu Dhabi (NBAD) has reported an 18 per cent increase in net profits for 2014

National Bank of Abu Dhabi (NBAD) has reported an 18 per cent increase in net profits for 2014

National Bank of Abu Dhabi (NBAD) has reported an 18 per cent increase in net profits for 2014

Qatar National Bank (QNB) remains the largest bank in the GCC by total assets in 2016. Its acquisition of Turkey’s Finansbank has taken its total assets to $195.9bn as of the end of September, an increase of 37 per cent year-on-year.

This means QNB will not be overtaken following the merger of fourth-placed National Bank of Abu Dhabi (Nbad) and a second state-owned Abu Dhabi lender, First Gulf Bank (FGB). The as-yet-unnamed entity will have total assets of $176.5bn once the merger is complete early next year, making it the largest UAE bank and the second-largest in the GCC. Read more