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Monday, 26 December 2016

Year in review: NBAD-FGB merger to set tone for UAE banking sector in 2017 | The National

Year in review: NBAD-FGB merger to set tone for UAE banking sector in 2017 | The National:
"UAE banks didn’t have the best of years in 2016 amid an oil-inspired economic slowdown but a successful completion of the merger of National Bank of Abu Dhabi and First Gulf Bank, the country’s biggest lenders, in the first quarter of next year will be a watershed moment.

For years high oil prices made the crowded sector, with more than 50 banks, viable as the country was flush with cash but a reversal in the direction of the price of oil in summer 2014 has put a dent in the status quo. The merger of the two institutions, one which is strong in corporate lending and the other in servicing individuals, is expected to come with a host of cost benefits and may set a trend for other lenders to follow.


Investors have by and large hailed the combination, especially as NBAD is considered one of the safest banks in the world, and its high credit ratings will allow it to borrow money cheaply on behalf of the new entity, which will have assets of US$178 billion, making it one of the largest in the Middle East and North Africa."

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