Abu Dhabi is considering more mergers to boost its financial services industry after combining National Bank of Abu Dhabi PJSC (NBAD) and First Gulf Bank PJSC (FGB), according to four people with knowledge of the matter.
Bank stocks surged.
The oil-rich emirate is weighing a plan to merge Abu Dhabi Commercial Bank PJSC (ADCB) and Union National Bank PJSC (UNB) and also to combine Abu Dhabi Islamic Bank PJSC with Al-Hilal Bank PJSC, the people said, asking not to be identified as the plans are private. Abu Dhabi is considering further deals only after the NBAD-FGB merger is completed by March next year, the people said.
No final decision has been taken and the emirate may not pursue the mergers, they said.
Abu Dhabi decided to combine its two largest banks in July to create a regional powerhouse with US$175 billion of assets. The merger was seen as a precursor to more deals in the United Arab Emirates’ financial services industry, where about 50 lenders compete in a market of about 9 million people.
The emirate has also announced plans to combine two of its largest sovereign investment funds International Petroleum Investment Co and Mubadala Development Company PJSC, as well as mergers in industries from oil to education.
Abu Dhabi Investment Council, a sovereign wealth fund in the emirate, owns a 58 percent stake in ADCB and 50 percent of UNB, according to data compiled by Bloomberg.
The fund also holds a 7.6 percent stake in Abu Dhabi Islamic Bank and a holding in Al-Hilal.
The Abu Dhabi Securities Market Banks Index, comprised of 14 banking and financial services companies on the Abu Dhabi exchange, gained 2.6 percent yesterday, up the most since July 3. It has fallen about 6.7 percent this year.
Banks, like other industries in the region, are under pressure as the drop in oil prices has stifled Middle Eastern economies.
The case for a merger between ADCB and UNB became stronger after recent combinations in the United Arab Emirates, investment bank Arqaam Capital said in a research report last month.
ADCB which has a market value of about US$8.6 billion, has US$69 billion in assets, while UNB with a market value of US$2.9 billion, has US$29 billion in assets.
Japanese technology giant Softbank Group Corp said Tuesday it has sold its stake in Nvidia Corp, raising US$5.8 billion to pour into other investments. It also reported its profit nearly tripled in the first half of this fiscal year from a year earlier. Tokyo-based Softbank said it sold the stake in Silicon Vally-based Nvidia last month, a move that reflects its shift in focus to OpenAI, owner of the artificial intelligence (AI) chatbot ChatGPT. Softbank reported its profit in the April-to-September period soared to about 2.5 trillion yen (about US$13 billion). Its sales for the six month period rose 7.7 percent year-on-year
CRESTING WAVE: Companies are still buying in, but the shivers in the market could be the first signs that the AI wave has peaked and the collapse is upon the world Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported a new monthly record of NT$367.47 billion (US$11.85 billion) in consolidated sales for last month thanks to global demand for artificial intelligence (AI) applications. Last month’s figure represented 16.9 percent annual growth, the slowest pace since February last year. On a monthly basis, sales rose 11 percent. Cumulative sales in the first 10 months of the year grew 33.8 percent year-on-year to NT$3.13 trillion, a record for the same period in the company’s history. However, the slowing growth in monthly sales last month highlights uncertainty over the sustainability of the AI boom even as
AI BOOST: Next year, the cloud and networking product business is expected to remain a key revenue pillar for the company, Hon Hai chairman Young Liu said Manufacturing giant Hon Hai Precision Industry Co (鴻海精密) yesterday posted its best third-quarter profit in the company’s history, backed by strong demand for artificial intelligence (AI) servers. Net profit expanded 17 percent annually to NT$57.67 billion (US$1.86 billion) from NT$44.36 billion, the company said. On a quarterly basis, net profit soared 30 percent from NT$44.36 billion, it said. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said earnings per share expanded to NT$4.15 from NT$3.55 a year earlier and NT$3.19 in the second quarter. Gross margin improved to 6.35 percent,
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
RSS