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26 February 2024

Mergers 'on hold' as lenders ride out the financial storm

Michael Tomalin (SUPPLIED)

By Reuters

Mergers among leading UAE banks are on hold due to the economic turmoil despite the need to consolidate to face mounting foreign competition, the head of National Bank of Abu Dhabi said.

Chief Executive Michael Tomalin yesterday said Abu Dhabi needed to have a bigger domestic bank to compete more effectively with global behemoths.

Tomalin said NBAD, the second largest bank in the UAE, has made several proposals to its government owners to grow through mergers, especially after the 2007 merger of two Dubai banks to create the vast Emirates NBD.

"It has not gone that way. In these markets, the case for consolidation is less pressing. It should be done when the economic climate is good," Tomalin said.

"My sense is, it is not on the agenda now. But it is for the owners to consider."

NBAD plans to grow locally and abroad by increasing its number of branches. The bank, which has 80 branches in the UAE, plans to open at least 15 new branches in the country this year.