The Legacy of National Bank of Abu Dhabi: A Pillar of UAE’s Financial Growth

Originally established as the first local bank of Abu Dhabi emirate back in 1968, National Bank of Abu Dhabi, or NBAD, was one of the true pioneers of the banking scene in UAE. Over the passage of decades, the financial institution that began modestly as a domestic institution came to be one of the financial powerhouses, not just of the UAE but also of the entire Middle East and international level. This expansion strategy and innovative banking services paved its way to become the largest bank in the region, First Abu Dhabi Bank (FAB), after the merger with the First Gulf Bank (FGB) in 2016. Today, NBAD’s legacy lives through FAB’s activities, still dominating the MENA region.

National Bank of Abu Dhabi was established in 1968, under the guidance of the UAE’s visionary founder, Sheikh Zayed bin Sultan Al Nahyan. The aim of this bank was to establish a financial institution large enough to cater to the increasing economic requirements of Abu Dhabi and eventually other emirates. The banks specialized in retail and corporate banking services, later further developing their portfolios into wholesale, investment, and Islamic banking. It was in the 1970s when NBAD emerged as the first UAE bank to take its activities abroad, opening its first international branch in Cairo, Egypt in 1975. It continued its journey into Europe and North America by making a presence in London and the U.S. by end-1977, thereby granting its ambition of building a global presence.

The expansion of NBAD was centered on the West-East Corridor, as defined by the bank as the geographical area from West Africa to East Asia. During this period, the bank expanded a strong international presence through branches, subsidiaries, and representative offices in 17 countries, including Malaysia, India, Hong Kong, China, and South Korea. Thus, focusing on the emerging markets in Asia and Africa, the bank was planning to become a global player in the financial ecosystem. Its international expansion included partners in the industries too with companies like Unilever and Siemens where it can use banking capabilities across other businesses. By 2015, NBAD had established a regional finance base in India with this development underpinning the intentions of deepening its penetration in the South Asian market.

In June 2016, NBAD announced that it would merge with First Gulf Bank (FGB), a move that was to transform the financial landscape both in the UAE and the wider MENA region. The deal that was completed in December 2016 formed First Abu Dhabi Bank, which has since become the largest Middle East and North Africa bank by assets. It was structured on a share-for-share basis whereby FGB shareholders were made to receive 1.254 NBAD shares for every FGB share owned. This strategic move was in the name of meeting the objective of establishing a bank with the competitive power to compete in the international arena, combined with greater financial muscle and a broadened services profile. Today, FAB stands as a symbol of the strength of the union between NBAD and FGB whose operations now traverse five continents.

NBAD also played a leading role at the leadership level in Islamic banking in the UAE. NBAD also offered Sharia-compliant banking through its subsidiary, Abu Dhabi National Islamic Finance Company (ADNIF), established in 2008, given growing demand for ethical banking solutions within the region. The bank’s range of Islamic banking products primarily consisted of retail, corporate, and investment banking services, which helped it to attract a diverse customer base. In the financial services sector, the bank was also innovating into modern wealth management, private banking, and property management. The capability of NBAD to be responsive and change according to the needs of the market has helped the bank to be placed among the safest and most stable banks in the world.

The rating agencies that are internationally recognized also gave high credit ratings to NBAD. In fact, in 2013, Standard & Poor’s raised the credit rating of the bank on account of close relations with the government of Abu Dhabi and recognition of the importance of the bank for the financial system. The Moody’s agency, Fitch, and other agencies constantly ranked NBAD among the safest banks in the world.