National Bank of Abu Dhabi and First Gulf Bank are examining possibilities of a merger. If it happens, it will create the largest bank in the Middle East. Discussions about a combination are preliminary, according to sources. With assets of about $170 billion, the merged entity would surpass Qatar National Bank as the largest bank in the region. Analysts said there is scope for revenue synergies if the merger does occur, because FGB is a retail-oriented bank while NBAD is more corporate focused. Also, this could be the beginning of a trend of consolidation in the sector, considering that growth outlook for the UAE is relatively weak. The deal, when it happens, will also mark the UAE’s first major banking-industry merger since National Bank of Dubai and Emirates Bank International combined to create Emirates NBD in 2007. The UAE is home to about 9 million people and has about 50 banks, including the local units of Citigroup, HSBC and Standard Chartered. NBAD, with a market value of about $11.3 billion, is 69% owned by sovereign wealth fund Abu Dhabi Investment Council. State-owned investment fund Mubadala Development is the biggest shareholder in FGB, whose market capitalization is $14.4 billion.
