Shares of National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB) surged soon after markets opened on Sunday, pushing Abu Dhabi’s general index up by 3.2 percent within first hour of trade.
The banks, which are two of the largest in the United Arab Emirates (UAE), confirmed discussions on a possibility of a merger or combination to establish the biggest lender in the Middle East.
NBAD was limit up within 45 minutes, reaching AED 9.2, with volumes amounting to 1.8 million. FGB rose 7.7 percent to AED 12.65, with volumes rising to over 2 million.
Together the two banks accounted for nearly half the trades in the first hour.
“Each bank has formed a working group made up of a senior executive management to review the commercial potential along with any legal and structural aspects of a merger or combination,” the lenders said in a joint statement.
“At this time, there is no certainty that discussions between NBAD and FGB will result in a merger or combination,” it added.
The potential merger or combination — with assets of about $170 billion — would make the UAE lender bigger than Qatar National Bank (QNB), which is currently the largest in the region.
Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com
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