How Abu Dhabi Megabank Would Square With Rivals in Four Charts

  • Combined entity would have a market value of about $29 billion
  • A merged NBAD and FGB would control over 25% of U.A.E. loans

A merger of the two largest banks in Abu Dhabi would create a lender whose market value overtakes some of the best-known global banks.

National Bank of Abu Dhabi PJSC and First Gulf Bank PJSC said on Sunday they are in the early stages of evaluating a combination. If completed, it would create a bank with a market value of about $29 billion, larger than that of Credit Suisse Group AG, Standard Chartered Plc or Deutsche Bank AG.

While the combined entity would be a fraction of the size of the global banks in terms of assets, profitability would be higher, according to data compiled by Bloomberg. NBAD had a return on equity of 14 percent in the first quarter and First Gulf Bank almost 21 percent. That compares with 5.3 percent for Goldman Sachs, 9.2 percent for UBS and negative returns for Credit Suisse and Deutsche Bank.

The combined entity would control more than a quarter of lending of listed banks in the United Arab Emirates, according to data compiled by Bloomberg. That could help it better compete with domestic and foreign rivals.

Its share of deposits would also rise to more than a quarter of those in the U.A.E. and help reduce cost of funds for the combined entity.

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