The Gulf's largest Arab bank is set to be created following the merger of two UAE financial institutions.
Emirates Bank International and the National Bank of Dubai directors announced the deal on Monday after agreeing the terms of a merger first announced in March by Shaikh Mohammad Bin Rashid Al Maktoum, UAE vice-president and prime minister.
The government of Dubai, part of the United Arab Emirates federation, owns 76 per cent of Emirates Bank and 14 per cent of National Bank.
Ahmad Humaid Al Tayer, chairman of EBI, said: "The objective of this merger is to create a strong entity that will play a major role in the banking industry."
Biggest Gulf bank
The deal will create the biggest banking institution in the Gulf in terms of deposits, profit, assets and market capitalisation.
"The objective of this merger is to create a strong entity that will play a major role in the banking industry"
Ahmad Humaid Al Tayer, Emirates Bank International chairman |
Al Tayer will hold the post of board chairman of the new bank and Abdullah Mohammad Saleh, the chairman of NBD, will become deputy chairman.
Saleh said the merger is aimed at enabling the UAE to compete in global markets and face challenges such as Free Trade agreements with the US, as well as meeting demands of the World Trade Organisation.
The Dubai bourse suspended trading on Monday, as the merger process began.
"Both boards are going to go back to their shareholders and discuss with them the conditions," said Essa Kazim, chairman of the Dubai Financial Market.
"The shares will be suspended until all that information becomes public."