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.
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.