‘Emirates NBD, United Arab Emirates largest
lender by assets, will take over Dubai Bank following orders by the
vice president and Prime Minister of the UAE and ruler of Dubai,
Sheikh Mohammed bin Rashid Al Maktoum.

The consolidation comes in line with “Dubai
government’s efforts to enhance the banking sector in the emirate”
a statement released by the government said. No financial details
were disclosed.

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The Dubai government took over Dubai Bank in
May after its loan losses increased. Emirates NBD is 56% owned by
the government of Dubai.

The statement added, “Dubai Government is keen to
take the necessary steps to empower financial institutions to fully
operate in a way that serves the national economy and consolidate
the country’s position as a first class international financial
hub. The acquisition signals a new phase rich of opportunities for
Emirates NBD and Dubai Bank.”

When the Dubai government announced their full take over of
Dubai Bank, in a bid to keep the lender afloat and protect its
deposit holders, the government said it would inject capital into
the bank and consider a merger with another lender.

Dubai Bank was jointly owned previously by Dubai Holding and
Emaar Properties. Dubai Bank posted a net loss of AED290,642 ($79m)
in 2009, according to the last financial results posted on its
website.

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Emirates NBD was formed in October 2007 after
merging Emirates Bank International and National Bank of Dubai.
Emirates NBD’s second-quarter net profit surged 87% to AED744m in
July.

Dubai Bank has a total of 20 retail branches
across Dubai, Abu Dhabi and Al Ain, Sharjah, Ajman, Fujairah and
Ras Al Khaimah, and Emirates NBD has over 132 retail branches
spread all across the UAE.