Bank Emirates NBD, the largest bank in the United Arab Emirates (UAE) by assets, will take over Dubai Bank for an unspecified sum, a move which was directly ordered by Sheikh Mohammed Bin Rashid Al Maktoum, the ruler of Dubai and Vice President and Prime Minister of the UAE, state news agency WAM said Tuesday.
Dubai Bank, which is one of the smallest local lenders and which does mostly retail and private banking, was founded in 2002 as a conventional bank, but later transformed itself into an Islamic bank.
Chairman of Emirates NBD is Sheikh Ahmed Bin Saeed Al-Maktoum, who is also Chairman of Emirates Airline and Dubai World.
This step reflects the government's flexibility in dealing with the economic variables and crystallizes the future vision designed at empowering local banking entities so they can fully play their roles with the local economy. It also reflects the will of granting a strong impetus for national financial institutions to compete regionally and globally, WAM said.
Dubai Bank was taken over earlier this year on May 16 already by the Dubai government "in order to protect depositors' interests and avoid a default." It is not clear what brought Dubai Bank into troubled waters, albeit it is well-known that some UAE lenders overexposed themselves in the crisis-ridden real estate market.
Some 23 local banks and 28 foreign lenders operate in the UAE.
Emirates NBD or ENBD, whose shares are listed at the Dubai Financial Market, reported in July for the first half-year a 43 percent higher net profit of 2.2 billion Dirham (US$600 million).
