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Too many banks, too few people
As reports surface that Emirates Islamic Bank and Dubai Bank could be merging, Kipp takes a closer look at bank mergers in the region. Are there more on the way?
October 4, 2010 4:40 by Eva Fernandes
In our crazy world of constant change, the bank is one of the few institutions people can trust. It’s synonymous with stability and security. Well, at least it was until two years ago.
At the onset of the financial crisis, Kipp was overwhelmed with the news of the numerous mergers and acquisitions amongst various international institutions within the banking sector. They fell like dominoes, one after the other: from the Bank of America’s acquisition of Merrill Lynch, Royal Bank of Scotland’s acquisition of ABN Amro to Barclays’ acquisition of Lehman Brothers.
Here in the UAE, although some experts say there is an excess of banks, only one merger – between Emirates Bank International and National Bank of Dubai – has taken place in recent history. Until this week, that is, when reports surfaced that Emirates Islamic Bank (EIB) is in talks to merge with Dubai Bank.
Dubai Bank is a unit of the Dubai Banking Group, which is a part of Dubai Holding. Speaking to Gulf News, a source close to the negotiations said there have been discussions that include the possibility of bringing Amlak, an Islamic mortgage finance company, under the newly created banking entity following the merger.
The source said the move is “part of a new plan to restructure and strengthen the balance sheets of smaller banking entities that face difficulties because of the slowdown.”
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