Gulf banks discussing mega-merger

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Emirates Bank International and National Bank of Dubai are discussing a merger to create the Gulf's largest bank by assets and market value.

It would have a combined capitalisation of $11.25bn (£5.6bn), topping National Bank of Abu Dhabi - the largest bank by market value in United Arab Emirates.

The banks have asked the Dubai bourse to halt trading in their shares.

The stocks will remain suspended until the two lenders announce details of the deal after consulting regulators.

State involvement

It is thought that process of consultation could take about two weeks.

The two lenders said in March they would merge and appointed investment bank Goldman Sachs to advise them on the deal.

The government of Dubai, part of the United Arab Emirates, owns roughly three-quarters of Emirates Bank and 14% of National Bank.

"Both boards are going to go back to their shareholders and discuss with them the conditions," said Essa Kazim, chairman of the Dubai Financial Market.

"The shares will be suspended until all that information becomes public."

The banks had assets worth $48.7bn at the end of the first quarter of the year.

This would make any new entity bigger than Saudi Arabia's National Commercial Bank as the Gulf's largest lender by assets.