Emirates NBD Bank, the largest lender in the United Arab Emirates, has taken over the troubled Islamic lender Dubai Bank on orders of the ruler of Dubai, a government statement said on Tuesday.
“Sheikh Mohammad bin Rashed al-Maktoum, Vice President and Prime Minister of the UAE, in his capacity as the ruler of Dubai, has given orders that Emirates NBD take over Dubai Bank,” the statement said.
It said the acquisition is in “line with Dubai government efforts to enhance the banking sector in the Emirate (of Dubai),” which was hit hard by the global financial crisis.
Dubai Bank was acquired in May by the debt-laden government of Dubai, which pledged to inject capital into the troubled lender.
At the time, the government said the takeover would ensure that Dubai Bank’s business continues uninterrupted.
Dubai Bank posted a net loss of 290.6 million dirhams ($79.2 million) in 2009, the last financial results to be made public.
Before the takeover, Dubai Bank was jointly owned by Dubai Holding, with a 70 percent stake, and Emaar, Dubai’s main property corporation, with 30 percent.