Abu Dhabi: The boards of directors at First Gulf Bank (FGB) and the National Bank of Abu Dhabi (NBAD) have approved the merger of both entities in the first quarter of 2017, thereby creating an entity with Dh642 billion in total assets.

The new entity, which will retain the brand name of the National Bank of Abu Dhabi, will be the largest bank in the Middle East and North Africa by assets.

The merger will be executed through a share swap, with FGB shareholders receiving 1.254 NBAD shares for each FGB share they hold.

Both banks will continue to operate independently until the merger becomes effective in Q1 2017, and the on the date of the merger, FGB’s share will be delisted from the Abu Dhabi Securities Exchange.

Following the issue of the new NBAD shares, FGB shareholders will own approximately 52 per cent of the combined bank and NBAD shareholders will own approximately 48 percent. The Government of Abu Dhabi and related entities will own approximately 37 per cent.

The board of directors of the merged entities will include four nominated directors of FGB and four nominated directors of NBAD. Sheikh Tahnoon Bin Zayed Al Nahyan, who is currently Chairman of FGB, is the Chairman designate.

Nasser Ahmed Alsowaidi, who is currently Chairman of NBAD, is the Vice Chairman designate, and Abdulhamid M. Saeed, who is currently Board Member and Managing Director of FGB, is the Chief Executive Officer designate for the combined bank.

New board and management will assume the new roles when merger becomes effective. Until then, Andre Sayegh and Alex Thursby will continue to lead their banks independently as Group Chief Executive Officers of FGB and NBAD respectively.

His Highness Shaikh Mohammed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, said the merger will contribute to the UAE’s sustainable business environment.

“The merger of FGB and NBAD will create high-value opportunities for the people of the UAE and further breadth to be internationally competitive, core aims of Abu Dhabi’s Economic Vision 2030 and in keeping with the UAE’s long term economic ambition,” he said.

The announcement sent NBAD’s and FGB’s shares up around five per cent and four per cent respectively in early trade, as Abu Dhabi’s benchmark index gained around 1.5 per cent in the first hour of trade.