Dubai: Abu Dhabi Islamic Bank, which bought Barclays PLC’s retail business in the UAE, dismissed reports that it may merge with Al-Hilal Bank as consolidation takes hold in the emirate’s financial-services industry.

“For the time being we’re going to stick to our core markets and strengthen our presence,” Tirad Mahmoud said in an interview with Bloomberg TV on Wednesday. “When we see stability globally, you’ll see see us come back into international expansion again.”

Abu Dhabi — where about 50 lenders compete in a market of about 9 million people — is combining National Bank of Abu Dhabi and First Gulf Bank and two sovereign wealth funds as it seeks to cut costs and merge firms with overlapping assets. The next step could be a tie-up between ADIB with Al-Hilal and a combination of Abu Dhabi Commercial Bank and Union National Bank, people with knowledge of the matter said in November.

Mergers are “a shareholder issue, but common sense says that if the pie is shrinking, capacity also has to shrink,” Mahmoud said.

ADIB posted a 1 per cent rise in 2016 net profit to Dh1.95 billion ($530 million) on Tuesday as provisions rose to Dh970 million from Dh820 million. There’ll be “some pressure” on net interest margins this year, he said.