Family bonding: Two banks in Dubai get new Maktoum chairs. So what?
The motive behind the moves is more important than the moves themselves, and exactly how much of an impact will the shuffles have on Dubai’s banking sector.
June 28, 2011 8:01 by Precious de Leon
Is Dubai’s banking sector really in flux? That the two leading seats have been officially refreshed in the emirate’s banking sector within the last 48 hours is a clear indication to some that this is not an ordinary shuffle.
But to Kipp, the more important focus is on the motives behind the decisions. And our attention is than peaked for this one.
This Monday, HH Sheikh Ahmed bin Mohammad bin Rashid Al Maktoum has been appointed Chairman of the Board of Directors of Noor Islamic Bank (NIB), replaces Sheikh Ahmed bin Saeed Al Maktoum.
This is just as well since the latter, who is also Chairman of Dubai’s Supreme Fiscal Committee, Dubai Aviation Authority, Chairman of Emirates Group, and Dubai World, replaced Ahmed Humaid Al Tayer as the head of the UAE’s biggest bank by assets Emirates NBD on Sunday.
While bankers like Mashreq Capital CEO Kadir Hussein say that “People change senior management and board because they want things to move in another strategic direction.” Kipp’s a little less excited about the change—mostly because the change was not brought on by anything the incumbents did or didn’t do (no drama) and because both banks remain under the same overall structure and umbrella. Also, aren’t shuffles like this common practice in any organisation?
Also, taking a couple of steps back, this may not have been such a ‘surprise’ move, but could be seen quite matter-of-factly. The more experienced Sheikh Ahmed takes on the older, larger and more established company while the ‘fresher’ Sheikh Ahmed takes on the five-year-old bank that has been no doubt been built over sturdy foundations.
And Kipp’s got nothing against that, especially with the Dubai government having stakes in both banks, as well as with four other banks in the UAE. Dubai, for example, has 55.6 percent stage in Emirates NBD.
Of course, Kipp could be misled. After all, the banking sector has seen some rumblings including that of the Shariah facility being launched and last May’s speculations that NIB was “touted as a possible candidate to absorb troubled Islamic lender Dubai Bank, which was recently taken over by the Gulf emirate’s government.” Rumours that NIB CEO Hussain al-Qemzi denied.
What do you think? Should we be holding on to our hats for an exciting summer for the banking sector? Or is this another ‘family bonding’ experience that UAE just normally experiences every now and then?