Banks merge to create UAE'S third largest lender.

The third largest banking giant in the UAE with Dh423 billion in assets came into being on Wednesday following the merger of Abu Dhabi Commercial Bank, Union National Bank and Al Hilal Bank.

The new round of consolidation, more than two years after the merger of the National Bank of Abu Dhabi and First Gulf Bank to create the Dh671 billion First Abu Dhabi Bank, seeks to create another financial titan with increased pricing power ensuing reduced pressure on funding cost.

The merged ADCB Group, serving over one million customers, is a powerful new force in the UAE banking sector as one of the largest retail lenders, accounting for a 21 per cent market share of retail loans as at December 31, 2018.

Following the landmark transaction, the combined entity trades on Abu Dhabi Securities Exchange under the ticker of ADCB. UNB has been delisted and dissolved as a legal entity while Al Hilal Bank will remain a separate Islamic banking entity and will focus on serving retail customers through digital channels under its own brand.

Analysts said such a financial powerhouse will have increased ability to meet sizeable investment requirements.

Shares in ADCB Group, which becomes the second biggest financial institution in Abu Dhabi, began trading on Wednesday after the merger plan was announced last September.

The stock ended the day 1.8 per cent lower, underperforming the Abu Dhabi equity index, which was flat at 5,258 points.

Planning for the integration...