China in auto power play
It might not shake up the industry just yet, but China's interest in Volvo and Saab is the start of something big in global autos, writes columnist Wei Gu. Commentary
Gulf banks downplay merger talk as shares jump
ABU DHABI (Reuters) - Executives at major United Arab Emirates banks downplayed speculation on Sunday that big mergers were imminent after shares in Abu Dhabi Commercial Bank ADCB.AD and National Bank of Abu Dhabi NBAD.AD soared.
Long-standing pressure on Gulf banks to consolidate amid growing competition from international players is expected to increase as tensions from the credit crisis sweep the booming Gulf Arab region.
Gulf Arab banks have already tightened lending as interbank borrowing costs mount, in a move expected to erode profits.
"We discussed (the rumors) at our management meeting and we received no instructions from the board or the higher authorities," NBAD's Chief Operating Officer, Abdullah Salah Abdul Rahim, told Reuters.
"We have no information at all about a merger."
NBAD shares were up 3.93 percent at 0924 GMT with ADCB up 9.9 percent.
Market participants said consolidation rumors intensified last week after the central bank of the United Arab Emirates launched a 50 billion UAE dirham ($13.61 billion) emergency lending facility to ease tensions in the interbank market.
"There are some rumors in the market that the Abu Dhabi market will witness some mergers and acquisitions in the banking and real estate sectors," said Ahmed Hamdy, senior relationship manager at Prime Emirates.
"ADCB is one of the banks likely to be involved," he said.
But ADCB chief executive Eirvin Knox downplayed the import of the market talk. "There are lots of rumors. That is all," he told Reuters.
"I have no information on this. I am not aware of anything that is happening," Knox said.
Faced with growing competition from global players, lenders in the world's biggest oil-exporting region have already been consolidating to help them better compete and diversify revenues.
Emirates NBD ENBD.DU, the largest Gulf Arab lender by assets, was formed last year in an $11.3 billion merger between Emirates Bank International and National Bank of Dubai, which like ADCB, were part-owned by the government.
The merger was brokered by the government, which has been pushing for more consolidation in the financial sector.
Some 45 banks operate in the UAE, a country of around 4.5 million.
(Additional reporting by Raissa Kasolowsky, Writing by Thomas Atkins; Editing by Lin Noueihed; dubai.newsroom@reuters.com)
($1=3.673 Uae Dirham)
