Abu Dhabi – Mubasher: Abu Dhabi Islamic Bank (ADIB) is considering a merger with a larger body or an acquisition of a smaller institution, people familiar with the matter said.

The UAE’s second largest Islamic bank is in discussions with financial advisers for considering strategic options, but it would prefer the acquisition choice, Bloomberg News reported, citing the people.

With the decline in crude oil prices, Abu Dhabi, the UAE’s capital and biggest sheikhdom, seeks to create more competitive banks, leading lenders to consider mergers.

ADIB was “the only entity that was left behind in the mega mergers, and now that it is considering a merger, the options are limited,” United Securities’ head of equity research in Muscat Joice Mathew said.

Abu Dhabi Commercial Bank (ADCB) is conducting a merger with Union National Bank (UNB) and together acquiring Al Hilal Bank.

ADIB’s profits rose 8.7% to AED 2.5 billion ($680 million) in 2018, from AED 2.3 billion ($630 million) in the prior year.

It is noteworthy that ADIB has about $34 billion in assets and a market value of $4.2 billion.