The merger is subject to regulatory approval.

Shareholders have approved the proposed merger of the First Gulf Bank and the National Bank of Abu Dhabi that will create the largest financial institution in the United Arab Emirates with assets of approximately AE$655 billion ($178 billion).

The merger, which was first proposed earlier this year, has been approved by the Central Bank of the UAE but requires further approval from international regulators and the Securities and Commodities Authority. This is expected to occur towards the end of the first quarter of next year, the firms said.

The recommended transaction will involve a share swap, which will see FGB shareholders receive 1.254 NBAD shares for each FGB share they own. Once the new NBAD shares are issued, FGB shareholders will own approximately 52 per cent of the combined bank, while NBAD shareholders will own the estimated remaining 48 per cent stake. The government of Abu Dhabi and “government-related entities” will own around 37 per cent of the merged entity, according to a statement published by the two firms.

On the effective date of the merger, FGB shares will be de-listed from the Abu Dhabi Securities Exchange.

“The overwhelming vote of support from FGB and NBAD shareholders to approve this historic merger is a clear testament to the compelling rationale and value proposition for creating a bank with the financial strength, scale and expertise to deliver benefits for our customers, our shareholders and for the wider UAE economy,” said Sheikh Tahnoon Bin Zayed Al Nahyan, FGB's chairman.

Nasser Ahmed Alsowaidi, chairman of NBAD, commented: “The new larger bank will be in an excellent position to invest in our people, in technology, in products and services that our increasingly sophisticated client base demands, while capitalising on growth opportunities in the UAE and beyond.”