n a preliminary statement, knowledgeable sources revealed that the Bank of Dubai may merge with the Emirates Islamic Bank NBD (EIB).
A committee comprising of Emirates NBD’s executive director Rick Bender, and senior representatives of Dubai Bank and EIB found that the merger would be possible given EIB’s sophisticated system which allows it to fully absorb Dubai Bank’s operations, in addition to significantly minimizing costs as a result of adopting a unified system, Alkhaleej said.
In an unsourced report, the Sharjah-based Arabic language daily said the merger would cut costs for both banks, adding that the committee decided it would not be feasible for Dubai Bank to remain a separate entity because of the downturn in business in the country and the surge in Shariah-complaint bank services.
“The committee may take between 4 and 6 months to come out with the best solution for the group….a source close to the committee said several options are available, including the merger of Dubai Bank and EIB,” the paper said.
Emirates NBD Bank, the largest lender in the Gulf, took over Dubai Bank in October by of Sheikh Mohammed bin Rashid Al Maktoum, the UAE’s Vice President, Prime Minister, and Ruler of Dubai.
A statement said the acquisition was in line with Dubai government efforts to enhance the banking sector in the Emirate.
Dubai Bank was acquired in May by the government of Dubai, which pledged to inject capital into the troubled lender. At the time, the government said the takeover would ensure that Dubai Bank’s business continues uninterrupted. (Source: www.yallafinance.com)
