Abu Dhabi is planning to merge three banking entities to create a bank with nearly $110bn in assets, Bloomberg reported citing people familiar with the development.

Under the plan, the operations of three lenders Abu Dhabi Commercial Bank, Union National Bank and Al Hilal Bank are expected to be merged.

According to the report, the final decision regarding merger has not yet been taken and may come by the end of this month.

Mubadala, the majority stakeholder of Abu Dhabi Commercial Bank and Union National Bank through the Abu Dhabi Investment Council, did not confirm the development.

Al Hilal Bank also declined comment on the bank merger.

According to Bloomberg data, the combined bank will be the fifth largest entity in the Gulf Cooperation Council, which includes all major countries in the Arabian Gulf region.

The move is said to be part the UAE strategy to diversify and manage its wealth and economy pre-dominantly based on oil reserves.

Last year, National Bank of Abu Dhabi and First Gulf Bank merged last year to create First Abu Dhabi Bank.

In the last month, Barwa Bank and International Bank of Qatar, both middle-eastern lenders within the Gulf Cooperation Council region, signed agreement to merge their operations.

The merger, subject to various closing conditions, will create a combined lender with total assets of $22bn.