NBAD, FGB assets jump to AED655.8 billion before implementation of merger

ABU DHABI, 7th February, 2017 (WAM) -- The total combined assets of National Bank of Abu Dhabi, NBAD, and First Gulf Bank, FGB, jumped to AED665.8 billion at the end of 2016, as revealed before the execution of a planned merger during the 1st quarter of the current year. The same financial data showed a rise in their combined deposits to around AED402.58 billion and loans to AED357.2 billion at the end of 2016. "The two banks will meet with the Securities and Commodities Authority, SCA, in the next two months for final approval of the merger to agree the timetable for implementation," said the SCA in an exclusive statement to Emirates News Agency, WAM. Bankers have confirmed that the expected merger would result in the establishment of the largest banking entity in the Middle East. This could encourage more mergers between banking entities operating in similar sectors, including those in the UAE. The planned merger is expected to achieve a decrease in annual costs of around AED500 million annually, while the profit in terms will be reaped over a period of three years. The one-time cost of unifying the businesses is estimated at AED600 million. The General Assemblies for NBAD and FGB agreed to set 12th July, 2016, as the date for the merger in accordance with Article 283 (1) of Federal Law Number 2 for 2015, which applies to commercial companies. The merger will be executed through the "stock exchange" mechanism, where the shareholders of First Gulf Bank will receive 1, 254 stocks from National Bank of Abu Dhabi for each stock they own in the First Gulf Bank. Following the release of new stocks by National Bank of Abu Dhabi, the shareholders of First Gulf Bank will own around 52 percent of the merged bank, while the shareholders of NBAD will own around 48 percent, and the Abu Dhabi government and relevant authorities will have 37 percent of total share quota. Following the merger, the securities listing for First Gulf Bank at the Abu Dhabi Securities listing will come to an end as of the date of execution, which will then usher in the official closure of FGB. – Emirates News Agency, WAM -http://www.wam.ae/en/details/1395302595891