Running Head: MERGER AND ACQUISTION
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Merger And Acquisition
Profile
National Bank of Abu Dhabi is the largest bank of the Abu Dhabi started its operations in
February 18, 1968 and it’s headquarter is located in Abu Dhabi and acquires the position of the
second largest lender of United Arab Emirates (National Bank of Abu Dhabi, 2014).National
Bank of Abu Dhabi offers variety of services in different fields including corporate, retail,
private and investment banking. There are seven different segments through which the bank
operates its business that are
Domestic Banking: It operates in the consumer banking, commercial banking and elite
banking
International Banking: It operates in the overseas banking network and credit derivative
book
Financial Markets: It operates in international capital markets and money market, foreign
exchange team, institutional and corporate coverage department and Mena equity
Corporate banking: it operates in providing corporate and investment client with different
directions ad bespoke innovative solutions
Investment Banking: it operates in providing corporate and investment client with
different directions ad bespoke innovative solutions
Global wealth: It operates in private banking and asset management group
Islamic Business: it includes the Islamic finance and Islamic division of Abu Dhabi
Head Office: it provides the administrative support to all units including the main
operations.
Vision of National Bank of Abu Dhabi
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Merger And Acquisition
The vision of the National Bank of Abu Dhabi is to acquire the top position in the United Arab
Emirates (Structure of National Bank of Abu Dhabi, 2018).
Mission of National Bank of Abu Dhabi
The mission statement of the bank states that to make possible the provision of the quality
customer services to its customers (Structure of National Bank of Abu Dhabi, 2018).
Values of National Bank of Abu Dhabi
To be available to the customers 2 hours
To value its shareholders
Have an international status
Acquiring the information regarding the customers demand and need
To struggle for constant organizational excellence
Corporate Social Responsibility of Abu Dhabi National Bank
The bank strives hard for social and environmental growth of United Arab Emirates (Structure of
National Bank of Abu Dhabi, 2018).
National Bank of Abu Dhabi Information
Name National Bank of Abu Dhabi
Founded in 1968
Founder Late Sheikh Zayed Bin Sultan Al Nahyan
Head quarter Abu Dhabi
Ownership Abu Dhabi Investment Council
Number of branches in UAE Over 100 branches
International Branches 60 branches across 17 countries
First international branch 1975, Egypt
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International branch in America 1981, Washington DC
United Kingdom 1977, London
France 1979
Far East branch 2009
South Asia 2012
Number of Subsidiaries 9
Number of ATMs and CDMs More than 500 ATMs and CDMs across UAE
Number of employees More than 7500
(Source: Companies History.Com)
Subsidiaries of Abu Dhabi National Bank
NBAD’S Subsidiaries Country of Incorporation
Abu Dhabi International Bank Inc. Willemstad, Curaçao
Abu Dhabi Financial Services LLC Abu Dhabi, United Arab Emirates
Abu Dhabi National Leasing LLC Abu Dhabi, United Arab Emirates
Abu Dhabi National Properties LLC Abu Dhabi, United Arab Emirates
NBAD Trust Company (Jersey) Limited Saint Helier, Jersey
NBAD Private Bank (Suisse) SA Geneva, Switzerland
Abu Dhabi National Islamic Finance Company Abu Dhabi, United Arab Emirates
Ample China Holding Limited Hong Kong
Abu Dhabi Brokerage Egypt Cairo, Egypt
Data for National Bank of Abu Dhabi
2015 (AED Million) 2014 (AED Million) 2013 (AED Million)
Total Income 4,549,179 5,050,311 4,863,229
Net Profit 5231,817 5578,869 4,733,125
Operating Profit 10,555,850 10,414,717 9,397,988
Total Assets 406,563,807 376,098,712 325,061,656
Total Deposits from 233,814,558 243,184,652 211,097,222
Customers
Total Loans and 205,913,553 194,279,352 183,811,494
Advances
Share holder equity 5,198,640 4,723,172 4,280,470
Interest expense (2,021,044) (1,935,649) (1,881,653)
(3,238,633)
General, (4,082,919) (3,696,033)
administration and
other operating
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expenses
Overseas income tax (298,143) (271,688) (220,324)
expense
Basic earnings per 0.97 1.04 1.05
share (AED)
Diluted earnings per 0.95 1.02 1.04
share (AED)
Return on Assets 0.012 0.014 0.014
Return on Equity 1.00 1.18 1.10
(Source: Annual report 2013 & 2015 of National Bank of Abu Dhabi)
1,200,000,000
1,000,000,000
800,000,000
600,000,000
400,000,000
2013 (AED Million)
200,000,000 2014 (AED Million)
2015 (AED Million)
-200,000,000
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Merger And Acquisition
Mergers and Acquisitions of National Bank of Abu Dhabi
After the financial crisis of 2008-09 many financial institutions were merged into other
institution because of the weak balance sheet position loaded with debts. Regardless of eroding
of quality of assets, banks faced the crisis and the policy of low interest helped the financial
institutions to deal with the bad debts slowly and gradually. Another main reason of merger is to
combine the businesses to attain the mutual benefits by increasing the size of the business and by
making it the most resourceful institution. The merger is also getting important because of the
rising trade tensions between United States and China that results in the sluggish economic
growth (Khan, 2018).
In 2017 the merger was done between the National Bank of Abu Dhabi and First Gulf Bank that
made the First Abu Dhabi Bank the largest bank of the United Arab of Emirates possessing the
$175bn assets (Kerr, 2018). The dependence on the government deposits by the lenders and the
changes in the oil price is among the main reason of rapid mergers taking place in the Gulf
banks. Also the six members of the Gulf Corporate Council that is Saudi Arabia, Qatar, United
Arab Emirates, Oman, Kuwait and Bahrain is possessing the large numbers of the banks
operating and according to the Bloomberg data almost 70 banks are serving the 51 million
population while in United Kingdom there are about 12 banks that are serving the 65 million
people. The quantity of the banks serving the population is quite large so to overcome this large
quantity and higher operational cost the merging of the financial institutions in the United Arab
of Emirates is taking place rapidly (Narayanan, 2019). The banking assets growth is directly
linked to the regional GDP that is a growth in the banking assets increases the GDP and vice
versa and it is largely dependent on the prices of oil because the economy of the gulf countries is
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Merger And Acquisition
highly dependent on oil production and price. Since 2014 the economies of the Gulf Corporate
Council countries is facing the prolonged period of low crude oil prices that effects the budget of
the government. Also the advanced technology, updated standards and value added tax
introduction increased the cost of the banking operations that increased the pressure on the
banking operations. The merger of the two most important banks of United Arab Emirates that is
National Bank of Abu Dhabi and First Gulf Bank to form the largest bank of United Arab
Emirates that is First Abu Dhabi Bank was a quite profitable decision which is both cost efficient
and have increased the business opportunities in the region. The combined unit First Abu Dhabi
Bank possesses the assets of around $188bn in June 2018. Following are the important mergers
of the GCC countries
Country Bank seeking to merge Combined Assets
Kuwait-Bahrain Kuwait finance house merge $92.6 billion
with Bahrain’s Ahli United
Bank
Dubai-Turkey Emirates NBD into Turkey’s $42.8 billion
DenizBank
Saudi Arabia Saudi British Bank into $72.5 billion
Alawwal Bank
Qatar Barwa Bank into Qatar $22 billion
international Bank
Oman Oman Arab Bank into Alizz $7 billion
Islamic Bank
Oman Bank Dhofar into National $20 billion
Bank of Oman
Abu Dhabi National Bank of Abu Dhabi $188 billion
into First gulf Bank to form
First Abu Dhabi Bank
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Merger And Acquisition
The merging of two important banks to form a giant entity will help the economy of the United
Arab Emirates to attain the effective position in the international financial market and a stronger
link to the global economy. Sovereign wealth fund institute states that Abu Dhabi UAE possess
the second largest sovereign fund around the globe and after merger they also acquire the largest
bank of the Mena region that will result in the strong economic position and more power to the
United Arab Emirates in region. The new largest entity that is First Abu Dhabi Bank will operate
as the largest and leading financial institution in United Arab Emirates and will also render its
services in 19 different countries through its branches. The merger enhances the competitive
position of the United Arab Emirates economy both domestically and internationally. First Abu
Dhabi bank is perceived to act as an engine for the economy of the United Arab Emirates by
attracting the high net worth entities for the investment purpose in United Arab Emirates. This
step was quite important for the UAE market because of nature of its market that is consumer
banking market and the merger of two important banks to become a giant was important to
support the corporations and industries. The merger will also result in supporting the both large
and the small multinational corporations and will also helps in eliminating the risk of economic
downturn due to the low oil prices because of the new opportunities of growth in the market. The
larger the bank more extended and reliable services it will provide to its customers, community
and thus results in economy growth. Mergers results in Unity and the outcome of the unity is
more power and this unity will help the economy of United Arab Emirates to overcome the
challenges of global crisis (Luzajic, 2016).
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References
Annual Report. (2013). National Bank of Abu Dhabi. Retrieved from
https://www.nbad.com/content/dam/NBAD/documents/corporate-governance-annual-
reports/Annual-Report-2013-Eng.pdf
Annual Report. (2015). National Bank of Abu Dhabi. Retrieved from
https://www.nbad.com/content/dam/NBAD/documents/corporate-governance-annual-
reports/Annual-Report-2015-Eng.pdf
Kerr,S. (2018). Trio of Abu Dhabi banks in merger talks. Retrieved from
https://www.ft.com/content/3a67e442-b01a-11e8-8d14-6f049d06439c
Khan,S.(2018). GCC banks lenders unite to be leaner and efficient in tough conditions. Retrieved
from https://www.thenational.ae/business/banking/gcc-banks-lenders-unite-to-be-leaner-
and-efficient-in-tough-conditions-1.806362
Luzajic,T. (2016). NBAD and FGB Merger Could Change UAE Banking. Retrieved from
https://cxm.world/nbad-and-fgb-merger-could-change-uae-banking/
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Merger And Acquisition
Narayanan,A. (2019). Why Gulf Banks Are Merging Like Never Before. Retrieved from
https://www.bloomberg.com/news/articles/2019-01-09/why-gulf-banks-are-merging-like-
never-before-quicktake
National Bank of Abu Dhabi. (2014). Retrieved from
http://www.companieshistory.com/national-bank-abu-dhabi/
Structure Of National Bank Of Abu Dhabi. (2018). UK Essays. Retrieved from
https://www.ukessays.com/essays/business/structure-of-national-bank-of-abu-dhabi-
business-essay.php?vref=1
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