Second Merger Wave May Hit U.A.E. Lenders as Industry Shrinks - Bloomberg:
Banks in the United Arab Emirates may go through a second wave of consolidation as lenders seek to improve profitability and tackle inefficiencies, according Bloomberg Intelligence.
Amid rising regulatory requirements and digital spending, “inefficient, less profitable and less well-capitalized banks are susceptible” to consolidation, BI banking analyst Edmond Christou said in a report on Wednesday. The absence of common shareholders and a lack of cross-Emirate deals have so far hindered transactions, he said.
Abu Dhabi Islamic Bank PJSC and Commercial Bank International PSC are among lenders that have under-performed in some areas and could benefit from “commercially driven” mergers, according to Christou. Mashreqbank PSC and National Bank of Ras Al-Khaimah PSC could be viewed as attractive targets, though Mashreqbank’s less supportive ownership makes it a less likely candidate, he said.
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