Dubai merger creates UAE's largest bank

Dubai: Emirates Bank International (EBI) and National Bank of Dubai (NBD) will merge to create one of the Middle East's largest banks with assets of Dh165 billion.

The merger, which took many in the banking sector by surprise, was approved by the government and creates a yet-unnamed entity with Dh65 billion higher assets than the country's biggest lender - National Bank of Abu Dhabi.

"The objective of this merger is to create a strong entity that will play a major role in the banking industry," Ahmad Humaid Al Tayer, chairman of EBI, told Gulf News.

The two banks were convinced about the importance of coming together as one entity, he said, adding that the merger will be a long process.

"The move is in line with the directives of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai," WAM said of the development.

EBI and NBD had a market value of $12.03 billion (Dh44.24 billion) at yesterday's closing prices.

Al Tayer will hold the post of board chairman of the new bank and NBD chairman Abdullah Mohammad Saleh will become deputy chairman.

Al Tayer said the merger had been under discussion for some time. "This move has come very late for the Arab region and the UAE," he said. "The country has not seen major mergers like this in awhile."

Speaking about the merger, Saleh told Gulf News: "I'm one of the happiest persons regarding this bold and great step which has came at the right time."

"I thank Shaikh Mohammad and the Dubai Government for encouraging such a step. I was among those who called for the merger because the banking sector has not really taken off ... it did not manage to keep pace with the progress happening in the UAE and worldwide," Saleh said.

Saleh said the merger is aimed at enabling the UAE to compete in global markets and face challenges such as Free Trade agreements (FTA) with the US and other countries as well as the World Trade Organisation's agreements.

EBI has a strong branding and a large retail presence while NBD has an edge in the corporate banking.

Raj Madha, a banking analyst at EFG Hermes, said the rationale in creating a large UAE bank has been clear for a long time.

"The question was really whether people were prepared to let it happen. It appears that the government of Dubai has given its blessing," he said.

At a glance: Emirates Bank

• Established: 1977
• Rank by assets in UAE: 2nd
• Rank by assets in Dubai: 1st
• Chair: Ahmad Humaid Al Tayer
• Total assets: Dh9.5878 billion
• Revenue: Dh2.896 billion
• Net profit: Dh1.888 billion
• Number of branches: 35 branches in the UAE, one in London, one in Mumbai and a representative office in Tehran
  

At a glance: National Bank of Dubai

• Established: 1963
• Rank by assets in UAE: 4th
• Rank by assets in Dubai: 2nd
• Chair: Abdullah Mohammad Saleh
• Total assets: Dh6.9279 billion
• Revenue: Dh1.861 billion
• Net profit: Dh1.106 billion
• Number of branches: 39 branches in the UAE, one in London and a representative office in Tehran

The merger of the two top banks in Dubai will be welcomed by the public and would open employment oppurtunities for UAE Nationals and make an impact in the banking sector. I personally bank with NBD and have a great relationship with the bank and I am proud to be associated with them. I am assured that the merger would provide excellent customer service and satisfaction and take it to another level.
Tarun
Dubai,UAE

The consolidation is bound to occur as the market matures. As there are two many banks in this space. This marriage between the top two should give (EB/NBD) completive advantage.
Mohammed
Dubai,UAE

Very bold and constructive decision. This clearly shows that Dubai is in line with international Standards and business accumen.
Anil
Dubai,UAE

I hope that this huge merger proves out to be a success story for both the parties in every way and for the Dubai Govt (Inshallah). It is actually creating a stepping stone for others to follow in this region and industry, soon.
Mohammed
Dubai,UAE

Excellent move. Surely the two have proven themselves and have the confidence and trust of their customers. Look forward to their best services throughtout the region.
Asim
Dubai,UAE