Bankers say that as the emirate’s main state-owned institution, NBAD enjoys better asset quality than FGB.
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State-owned National Bank of Abu Dhabi and First Gulf Bank, in which members of the ruling family have a significant interest, would surpass Qatar National Bank to become the region's largest lender.Few details are known about the potential deal, though analysts estimate that FGB could pay about $12.9bn for NBAD, which would amount to a 14 per cent premium to its market price.NBAD, which is run by former Standard Chartered executive Alex Thursby, is the larger of the two banks with $111bn of total assets.Investment bankers say that because both lenders have dominant state shareholders the decision to merge is likely to have been made by members of the Abu Dhabi royal family without much input from the banks' managers.They also predict that other Abu Dhabi banks are likely to feel pressure to merge, including Union National Bank and Abu Dhabi Commercial Bank. Mubadala Development Company, an investment vehicle of the Abu Dhabi government, owns 7.1 per cent of FGB.
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