Abu Dhabi’s Union National Bank (UNB) is establishing an Islamic insurance firm in partnership with the Orient Insurance Company and plans to partly sell the shares of new entity to public.

The Orient UNB Takaful, which is still under incorporation, will be 70 per cent held by the joint venture partners while 30 per cent of shares will sold to public in an initial public offering on Dubai Financial Market, according to a UNB statement on Abu Dhabi Securities Exchange, where its shares are traded.

It did not give details of planned IPO or how much cash the shareholders intended to raise.

The new entity has received initial approvals from UAE’s insurance Authority, Securities and Commodities Authority and Dubai’s Economic Development Department, the statement added.

UNB, was at the centre of speculation along with Abu Dhabi Commercial Bank (ADCB) and Abu Dhabi Islamic Bank (ADIB) and the Al-Hilal Bank. News reports in mid-November suggested that the government plans to merge UNB with ADIB and combine the two Islamic lenders separately once it is completes the ongoing deal to merge National Bank of Abu Dhabi and Frist Gulf Bank.

UNB, ADCB and ADIB have all denied being engaged in mergers talks.