ADCB names new board to lead the lender post three-way merger
The 11-member board will head the new lender with an asset base of Dh420 billion
Abu Dhabi Commercial Bank (ADCB), which is in the process of merging with two rival lenders, named the new board that will run the third-largest banking country when the merger becomes effective in May.
ADCB, which retains its brand identity after the merger with Union National Bank and integration of Islamic lender Al Hilal Bank, posted the make-up of the 11-member board in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
In January the boards of ADCB and UNB unanimously recommended shareholders agree to the deal that will create a lender with an asset base of Dh420 billion
The latest announcement follows the joint disclosure by ADCB and UNB earlier this month, which said the merger is likely to take effect on May 1. The shareholders of the two banks are scheduled to meet on March 20 to vote on the deal, the banks said.
“Following completion of the merger ... ADCB will acquire the entire issued share capital of Al Hilal Bank from its sole shareholder … in exchange, for the Acquisition Consideration,” it said without giving the financial value.
The boards of both lenders said the joint entity is “well-positioned to provide support for UAE’s economic vision, and to actively participate in the country’s growth and diversification”.
The latest consolidation follows the tie-up of two of Abu Dhabi’s biggest lenders, when National Bank of Abu Dhabi and First Gulf Bank became First Abu Dhabi Bank in 2017, creating a $188 billion banking powerhouse. Banks in the Arabian Gulf are increasingly looking to consolidate in a bid to gain scale and cut costs.
ADCB, currently the emirate’s second-largest lender, and UNB are majority owned by the Abu Dhabi Government. The emirate controls 100 per cent of Al Hilal Bank through Abu Dhabi Investment Council, the state-owned company that has tied up with Mubadala Investment Company.
With the merger, ADCB will become the fifth-largest bank in the Arabian Gulf. With a customer base of about 1 million, the new lender will account for 15 per cent of total assets in the UAE, 21 per cent of the retail loans market and 16 per cent of deposits, according to data as of September 30, 2018.
The deal will give the Government of Abu Dhabi, through ADIC, 60.2 per cent holding of the combined bank. ADCB shareholders will own 28 per cent and UNB shareholders will own 11.8 per cent of the combined bank, the lenders said in January.
Updated: March 12, 2019 11:23 AM