Banks in Abu Dhabi are set to merge later in this quarter which is set to impact UAE in several ways. ADCB (Abu Dhabi Commercial Bank) and UNB (Union National Bank) are set to merge. The combined company is then to acquire Al Hilal bank which is still set to act as a separate Islamic bank entity in this new group. It is expected for the final merged and acquired company to remain under the name of ADCB. This is the most recent merge of banks after the merger of National Bank of Abu Dhabi and First Gulf Bank last year. In addition to this, there has also been recent news about a potential merger of some local banks in Sharjah.
These numerous mergers are expected to strengthen UAE in its financial sector as they have more strong banks rather than numerous smaller banks. This enlarged bank is expected to help UAE’s economy as its increased scale, and combined expertise can play a crucial role in the future economic development in UAE. This also improves the financial consolidation of UAE, as a member of GCC, forming as the 5th largest bank in the region.
Although there are several benefits expected from this merger including the scope for the bank as its financial strength as one large bank can enable more investments within UAE businesses, it is expected to have a negative effect on jobs within the bank industry. This is likely since there was a similar impact during the previous merger of NBAD and FGB.
Whilst this emerging trend of bank mergers are set to impact the UAE economy in various ways, it is unlikely to directly impact any businesses in particular apart from the possible increase in local investments by banks. For more information regarding how this bank merger may affect your business or the economy, contact our financial industry experts at msi Alnoman & Ravi.