Abu Dhabi's FAB and ADCB deny merger report

The two lenders say they are focused on achieving their long-term growth objectives

ADCB says it is focused on carrying out its five-year strategy. Delores Johnson / The National

First Abu Dhabi Bank, the biggest lender in the UAE by assets, and Abu Dhabi Commercial Bank have said they are not in talks for a merger, denying a report that said they were close to finalising a potential deal.

“While the bank does not typically comment on speculation as a matter of policy, FAB strongly denies the report and, currently, has not entered discussions with ADCB to pursue any merger activity,” FAB said in a statement on Wednesday to the Abu Dhabi Securities Exchange, where its shares are traded.

“Any rumour to the contrary is unfounded and false.”

In a separate market disclosure to the bourse, ADCB, the third largest bank in the country, also denied the Al Arabiya report that claimed the two lenders are in merger talks to create the biggest banking entity in the region and that a deal could be announced later this year.

“ADCB is successfully implementing a five-year strategy and has been updating the market through regular disclosures,” its group chief executive Alaa Eraiqat said in the regulatory filing.

FAB said it remains fully committed to achieving its long-term “strategic ambitions” and creating value for its shareholders.

FAB was created through a merger of First Gulf Bank and the National Bank of Abu Dhabi in 2017.

ADCB completed its three-way merger with Union National Bank and Al Hilal Bank last year after formalising the deal in May 2020.

The lenders are among the biggest financial institutions in the region. FAB has an asset base of $272 billion, while ADCB has assets worth $120bn, according to Bloomberg data.

FAB shares have risen 21 per cent since the beginning of this year, pushing its market capitalisation to $68bn, while ADCB is valued at $20bn after its shares rallied 27 per cent over the period.

In January, ADCB reported a 38 per cent jump in its 2021 net profit to $1.43bn on the back of lower impairment charges.

FAB reported a 19 per cent jump in its full-year net income to $3.4bn on higher net fee and commission income, and gains on investments amid the UAE’s economic recovery.