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Tuesday, 11 October 2011

Dubai government orders bank merger -

Dubai has ordered Emirates NBD, the emirate’s biggest lender, to take over a troubled smaller competitor that was bailed out by the government earlier this year, as part of a move to consolidate a banking sector still suffering from bad debts.

The takeover of Dubai Bank by government-controlled Emirates NBD, one of the largest banks in the Gulf, is part of “necessary steps to empower financial institutions to fully operate in a way that serves the national economy,” the government’s media office said in a statement on Tuesday.

The move, ordered by Sheikh Mohammed bin Rashid al-Maktoum, Dubai ruler, comes after the government injected capital into Dubai Bank in May. Dubai Bank was created in 2002 as an Islamic institution by shareholders Dubai Holding, a troubled conglomerate owned by the ruler, and Emaar Properties, a large real estate group.