Dubai Bank taken over – an isolated case? | beyondbrics – FT.com

“Extend and pretend”, a common if maligned banking tactic when important clients are unable to repay their loans, can only get you so far, as Dubai Bank, an Islamic bank majority-owned by the debt-laden emirate, has discovered.

The Dubai government has been forced to take over Dubai Bank – wiping out the shareholding of Emaar and Dubai Holding, two other state-owned entities – to protect depositors, and is now considering whether the bank can continue as a standalone entity.

Dubai Bank’s woes raise questions as to the quality of loan books at other local banks.

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