First Gulf Bank (FGB) chief executive officer Andre Sayegh on Tuesday said its merger with the National Bank of Abu Dhabi (NBAD) will create a “large and strong” bank that can compete on an international scale.
The merger of the two Abu Dhabi-based banks was announced in July last year which when completed by end of first quarter 2017 will create one of the largest banks in the Middle East and Africa, with assets of around $175 billion (AED642bn).
“Who is going to groceries [these days] as it is a marginal business. Yes, they may continue to exist, but if you are not large and strong you cannot compete on international scale,” Sayegh told Arabian Business after shareholders approved distribution of 100 percent cash dividends for the financial year ended December 31, 2016.
“The world of finance cannot be cornered in four walls. You cannot work alone only in the domestic market… you have to work outside the UAE,” he added.
The bank reported a net profit of AED6.03bn for 2016 despite a challenging operating environment. Its market capitalisation reached AED62.1bn as of February 27.
Sayegh disclosed the merged entity will continue to work on improving cost synergies though the preliminary numbers indicated cost-saving of AED500m a year to be realised over a three year period and an estimated one-time integration cost of AED600m.
“We are working together [with NBAD]. We are waiting for the merger to become effective and till a new board comes into operation. After the merger, we will try to make it better than what was announced,” he said.
Sayegh said reports that more than 2,000 jobs could be lost in the merger were “exaggeration”.
“It’s all speculation. We don’t know as the issue of manpower has been exaggerated, but it is not the only issue,” he said.
FGB chief financial officer Karim Karoui revealed that the final date of the merger will be announced once the banks secure all the permissions. At present, the merger is expected to be completed by the end of the first quarter of this year.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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