About 1,000 jobs could be cut as part of a proposed merger between three banks in Abu Dhabi, Bloomberg reported.
Talks between Abu Dhabi Commercial Bank (ADCB), Union National Bank (UNB) and Al Hilal Bank are at an advanced stage, the report cited unnamed sources as stating.
The lenders are working valuation and conducting due diligence, although no final agreements have been reached, they added.
Last month, Reuters reported that Barclays had been appointed by ADCB to advise on the potential merger plan.
If the merger goes ahead, it would create an entity with around $113bn in assets, according to Refinitiv data, making it the UAE’s third-biggest and the the GCC’s fifth largest lender.
Plans for the merger were first announced by the banks in September.
ADCB said at the time that it was in “exploratory talks regarding a potential merger with Union National Bank” and had begun “similar and separate” discussions with Al Hilal.
“Both sets of discussions are currently at a very preliminary stage and may not result in a transaction,” it added.
Listed banks ADCB and UNB employ about 7,000 people, while privately-held Al Hilal is estimated to have about 1,500 employees, the Bloomberg report said.
The potential merger follows the combination of National Bank of Abu Dhabi and First Gulf Bank last year to create a lender with $175bn of assets.
The UAE Banks Federation said in an annual report released in late August that the sector was still ripe for consolidation given the large number of lenders serving the country’s 9.54-million population and the pursuit of cost savings.
There were 22 national banks and 27 foreign banks operating in the UAE as of December 2017, according to the federation’s report.
Earlier this year, it was also reported that that the Sharjah government was weighing a merger between United Arab Bank (UAB), Invest Bank and the Bank of Sharjah to create a lender with about Dhs66.2bn ($18.0bn) in assets.
However, the banks later denied the plans.