The merger between National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB) may create the UAE’s biggest lender in terms of its assets, but that does not necessarily mean it will have the biggest brand.
Following the completion of its merger, the company said last week that the combined entity would be known as First Abu Dhabi Bank.
It added that the combination would create not only the UAE’s biggest bank but also one of the biggest banks in the Mena region, with total assets of more than Dh670 billion.
Qatar National Bank, which is slightly larger in terms of asset value ($198bn at the end of 2016), is currently the most valuable bank, and the fourth most valuable brand in the region overall at $3.83bn, according to Brand Finance’s Middle East 50 ranking.
Emirates NBD is currently the UAE’s most valuable bank brand and the fifth-most valuable brand overall with a value of $3.41bn.
NBAD is now the third-biggest bank brand and the eighth-biggest overall valued at almost $2.5bn, while FGB is the 18th most valuable brand, with a value of $1.86bn.
In theory, a combination of the two using current brand values would give it a value in excess of both QNB and Emirates NBD, but Andrew Campbell, the managing director of Brand Finance Middle East, said things were not that simple – especially since the decision had been taken to create the new First Abu Dhabi Bank brand.
He said an analysis of the new brand’s strength would need to factor in “how effective they are in drawing out the qualities which customers and the market” had placed in the incumbent brands.
An assessment will also need to be done about the new brand’s presentation and the investment made in promoting it. “On the revenue side, obviously there is going to be a significant uplift on revenue as the two units are merged. So it’s going to be bigger, I suspect, than either NBAD or FGB. But exactly how big is down to how they execute over the coming months.”
Last week, the three credit rating agencies Fitch, Moody’s and Standard & Poor’s, all affirmed NBAD’s existing credit ratings would be applied to the merged firms. S&P also changed its “Creditwatch” outlook on the bank from negative to stable.
mfahy@thenational.ae
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