Sharjah’s UAB, Invest Bank deny reports of three-way merger with Bank of Sharjah

Sharjah lenders United Arab Bank (UAB) and Invest Bank have denied reports that they are currently holding talks for a three-way merger with the Bank of Sharjah.

“In relation to thee recent reports in the media related to he commencement of negotiations regarding a potential merger with three UAE banks, UAB denies the news and confirms its invalidity,” UAB said in statement to the Abu Dhabi Securities Exchange on Sunday.

Invest Bank also issued a similar bourse statement, stating that the media reports are based on “rumours and speculation”.

On Thursday, it was reported that the Sharjah government is weighing a merger between the three lenders to create a bank with about Dhs66.2bn ($18.0bn) of assets.

Invest Bank and UAB could be merged with Bank of Sharjah, majority-owned by the Sharjah government, sources told Reuters. The plan, driven by the Bank of Sharjah, is in its early stages and not yet public, the report added.

Read more: UAE’s Bank of Sharjah, Invest Bank, UAB in merger plan

UAB is currently in the process of restructuring following the accumulation of non-performing loans in 2015-16.

Last month, the bank concluded syndicated term financing facilities worth $185m, the proceeds of which will be used for general corporate purposes and the refinancing of an existing syndicated facility, it said.

The bank also concluded a rights issue of Dhs688m in March, which was oversubscribed, with total subscriptions of Dhs850m. The issue resulted in a capital adequacy ratio of 15.5 per cent.

The UAE’s banking space is starting to see greater consolidation even as the market reaches saturation – with about 50 banks operating in the country.

Three Abu Dhabi banks – ADCB, Union, Al Hilal Bank- are currently holding talks to merge operations, while two of the emirate’s biggest banks merged last year to create First Abu Dhabi Bank.

Read more: Abu Dhabi’s ADCB, Union, Al Hilal Bank in talks to merge