Abu Dhabi Commercial Bank picks Barclays to advise on Union, Al Hilal merger

Barclays has been appointed by Abu Dhabi Commercial Bank (ADCB) to advise on a potential merger plan involving Union National Bank (UNB) and Al Hilal Bank, banking sources told Reuters.

The merger, announced by the banks in September, is the latest consolidation among state-owned companies in the United Arab Emirates’ (UAE) capital.

ADCB, majority owned by the Abu Dhabi government and the second largest bank in the emirate after First Abu Dhabi Bank (FAB), declined to comment. Barclays also declined to comment.

If it goes ahead, a merger of the trio could create an entity with around $113bn in assets, according to Refinitiv data, and the UAE’s third-biggest lender after FAB and Emirates NBD.

Read: Abu Dhabi’s ADCB, Union, Al Hilal Bank in talks to merge

A separate source said two banks could be created out of the consolidation, with the conventional banking units of ADCB and UNB merging to create one lender.

Another could be formed through combining the Islamic banking units of ADCB and UNB, along with Al Hilal.

AlKhaleej newspaper reported the same arrangement was being considered last month, citing sources.

The tie-up was at an early stage, UAE Central Bank governor Mubarak Rashed al-Mansoori told reporters last week on the sidelines of a conference, adding he expected more consolidation in the future.

Read: UAE Central Bank governor expects 4.2% GDP growth next year

FAB was created by last year’s merger between National Bank of Abu Dhabi and First Gulf Bank.

The emirate of Sharjah is weighing a merger between three of its banks – Bank of Sharjah, Invest Bank and United Arab Bank, Reuters reported in September, citing sources.

Read: Sharjah’s UAB, Invest Bank deny reports of three-way merger with Bank of Sharjah