First Abu Dhabi Bank pulls out of talks to acquire Bank Audi Egypt

Dubai - Banking analysts expect merger and acquisition activity in the region to pick up when the dust around Covid-19 is settled.

First Abu Dhabi Bank, the UAE's largest bank, has decided to pull out of acquisition talks with Bank Audi's Egypt subsidiary due to the prevalent uncertainty surrounding the Covid-19 coronavirus and its impact on banks.

The two banks, who were engaged in talks for the past few weeks, had made significant progress on certain points of discussion but uncertain outlook in the aftermath of the pandemic has forced the lenders to stop talks.

"First Abu Dhabi Bank (FAB) has mutually agreed with Bank Audi to stop the transaction process regarding the acquisition of its fully owned subsidiary in Egypt (Bank Audi-Egypt). This is due to the unprecedented circumstances and the uncertain outlook relating to the Covid-19 pandemic, and is in the best interests of our shareholders, customers and employees," it said in a statement sent to Abu Dhabi Securities Exchange (ADX), where it is listed.

Banking analysts expect merger and acquisition activity in the region will pick up in when dust is settled around Covid-19 as many Middle Eastern countries are over-banked. Prior to the outbreak of Covid-19, around 20 banks were negotiating mergers and acquisitions worth an estimated $1 trillion of assets.

"The two banks have held productive discussions over the past few weeks, with significant progress made on many points. FAB would like to thank the Bank Audi team for their support and cooperation during the due diligence and the broader transaction process," Abu Dhabi bank said in the statement sent to ADX.

waheedabbas@khaleejtimes.com