Abu Dhabi is exploring the potential merger of three of its banks to create a lender with around $110bn of assets, according to reports.
Bloomberg cited sources as confirming discussions to combine Abu Dhabi Commercial Bank (ADCB), Union National Bank and privately held Al Hilal Bank.
If successful a deal could be announced as early as this month, the sources said, emphasising that a final decision has yet to be made.
The potential merger, which would create the Gulf Cooperation Council’s fifth largest bank, follows the combination of National Bank of Abu Dhabi and First Gulf Bank last year.
The UAE Banks Federation said in an annual report released last week 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 in recent years.
There were 22 national banks and 27 foreign banks operating in the UAE as of December 2017, according to the federation’s report.
Abu Dhabi has also merged other government-held units in recent years including state funds Mubadala, IPIC and Abu Dhabi Investment Council.
Mubadala, which holds majority stakes in ADCB and Union through the Abu Dhabi Investment Council merger, declined to comment.