The National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB) announced on Sunday they have merged to become First Abu Dhabi Bank.
In a joint statement, the banks said their merger was legally completed on April 1, and the merged bank began trading on the Abu Dhabi Securities Exchange under the ticker symbol NBAD.
Shares in the merged National Bank of Abu Dhabi and FGB – now known as First Abu Dhabi Bank – jumped on Wednesday as investors welcomed its forecast of higher profitability and a doubling of cost savings.
The bank said in an investor presentation published on its website that cost synergies are forecast at Dh1 billion, twice the initial estimate of Dh500 million. They would occur over a period of three years and would be driven by a reduction in branches and headcount.
At the same time, the bank said it was targeting a higher-than-expected return on equity, a measure of profitability, of 16 to 17 per cent by 2020.
Shares of the lender have rallied 9.1 per cent since Monday, closing 4.1 per cent higher at Dh11.35 on Wednesday
Customers of First Abu Dhabi Bank will have to wait at least a year and a half before the entire FGB and NBAD network is integrated.
It will take from 18 months to two years to complete the process of unifying the back-end operations and records of the two lenders, Wam reported.
However, two branches are currently servicing customers of both banks – at NBAD’s headquarters on Khalifa Street in Abu Dhabi and FGB’s main branch in Dubai.
Sources : Gulf News, TheNational,WAM