NBAD, FGB shareholders approve merger

Shareholders of First Gulf Bank and National Bank of Abu Dhabi have approved the merger between the two to create the UAE’s largest bank.

Shareholders voted in favour of the proposal at meeting on December 7 and it now requires further approval from international regulators and the Securities and Commodities Authority.

Read: NBAD, FGB shareholders to meet in Dec for bank merger approval

The combined bank will have $178bn in assets and is expected to produce cost savings of Dhs500m a year from 2019 primarily through the closure of overlapping branches and duplicated administration, according to Egypt’s EFG Hermes.

“The overwhelming vote of support from FGB and NBAD shareholders to approve this historic merger is a clear testament to the compelling rationale and value proposition for creating a bank with the financial strength, scale and expertise to deliver benefits for our customers, our shareholders and for the wider UAE economy,” said Sheikh Tahnoon Bin Zayed Al Nahyan, chairman of FGB.

The combined bank will have $178bn in assets and is expected to produce cost savings of Dhs500m a year from 2019 primarily through the closure of overlapping branches and duplicated administration, according to Egypt’s EFG Hermes.

A former Emirates NBD executive said earlier this year that the deal could result in cost savings of almost 30 per cent.

Read: NBAD, FGB merger could lead to 30% cost savings

The merger will involve a share swap with FGB shareholders receiving 1,254 NBAD shares for each FGB share they hold.

Following the issue of new NBAD shares, FGB shareholders will own roughly 52 per cent of the combined banked and NBAD shareholders 48 per cent.

The government of Abu Dhabi and government related entities will own approximately 37 per cent of the merged entity.

FGB shares will be delisted from the Abu Dhabi Securities Exchange and the company will be dissolved on the effective date of the merger.

The remaining approvals are expected to be achieved towards the end of the first quarter of 2017.