Abu Dhabi – Mubasher:  Moody's Investors Service stated that the merger of the National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB) will establish the Middle East’s largest bank by assets and will be credit positive for NBAD.

The agency added that the profits of both banks will benefit from this merger, as the new bank’s profits are projected to rise with percentages ranging between 1.2% and 1.6%.

The merger will boost revenues, strengthen FGB’s retail business volume and promote NBAD’s profitability margins, the report said.

Moreover, Standard & Poor’s (S&P) has placed the two banks on credit watch upon the announcement of the proposed merger.

“NBAD’s AA-/A-1+ long and short-term ratings are on watch with negative implications, while FGB’s A/A-1 ratings are on watch with positive implications,” S&P said in a note.

Moody’s added that upon execution, NBAD will become the largest bank in the GCC, with approximately $170 billion in assets.

The agency added that the merger will promote NBAD’s domestic franchise benefiting from FGB’s large domestic and profitable retail business, besides NBAD’s international business and its well-established local UAE wholesale operations.

The transaction is expected to be completed by the first quarter of 2017, as the two banks await the competent authorities’ approval.