Dubai Bank and EIB unify top management team
Move seen as a step by lenders towards full merger of its operations
Dubai: Emirates Islamic Bank (EIB) and Dubai Bank, two Islamic banking subsidiaries of Emirates NBD, announced yesterday that they have finalised the appointment of the unified top management team and the establishment of a unified executive committee that will manage both banks.
While sources have indicated that both banks are moving towards a full merger of its operations, unconfirmed reports said yesterday that these banks have received endorsement from the UAE Central Bank for merger.
The creation of a single management team follows the recent appointment of Jamal Bin Ghalaita as CEO of Dubai Bank in addition to his position as CEO of EIB.
"We have completed the selection and appointment of the unified top management team and the establishment of the Executive Committee that will manage both banks. This important milestone aims to unify the management team at Emirates Islamic Bank and Dubai Bank. This is a step towards further enhancing our customer service for the two banks," Bin Ghalaita said.
Under the new management structure, all key business units of both banks such as corporate, retail, treasury, finance, credit and IT have been unified and heads of these divisions will report dir-ectly to the CEO.
Emirates NBD has been working on the integration of its two Islamic banking entities following its acquisition of Dubai Bank last year.
New chief
The group announced the appointment of Bin Ghalaita as the new CEO of Dubai Bank last month and appointed Douwe Oppedijk, formerly interim CEO of Dubai Bank, as adviser to the new Dubai Bank CEO.
Banking industry sources said the management unification is a step ahead of the full merger of the two entities.
A merger of the two units is expected to create an Islamic bank of reasonably large balance sheet.
EIB posted a net loss of Dh448.55 million in 2011 compared to a net profit of Dh59.34 million in 2010. The bank's total assets fell more than 32 per cent to Dh21.48 billion in 2011 from Dh32.74 billion in 2010. EIB's impairment allowances surged to Dh783.3 million last year from Dh530.5 million in 2010.
Dubai Bank last reported its financial results in 2009. At the end of 2009, the bank had total assets of Dh17.4 billion against total liabilities of Dh15.7 billion. It made a loss of Dh290.6 million, wiping out 15 per cent of its equity, driven by high loan losses, investment losses and a high cost/income ratio. Customers' deposits stood at Dh14.9 billion at the end of 2009. In the fourth quarter Emirates NBD consolidated the balance sheet of Dubai Bank. The bank was acquired at a consideration of Dh10 in fair value with zero impact on the profit and loss account of Emirates NBD.
Adjustment
As part of the fair value adjustment Emirates NBD Group received a Dh2.8 billion deposit from the UAE Ministry of Finance at discounted rates. Additionally, the Government of Dubai provided a guarantee for any losses at the date of acquisition and any future losses relating to the assets and liabilities on the date of acquisition for the next seven years.
