Oct 20 2009 |
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MoF Buys Out Emirates Industrial Bank
DUBAI -- The UAE's Ministry of Finance on Monday completed the acquisition of the Emirates Industrial Bank by buying the remaining 49 per cent of the company that it didn't already own from 13 UAE-based entities.The buyout is a crucial step in the formation of the planned Emirates Development Bank , or EDB , which is envisioned as a catalyst for the country's industrial development, the Ministry of Finance said in an e-mailed statement.
The Ministry previously held a 51 per cent stake in Abu Dhabi-based Emirates Industrial Bank , or EIB . It planned to merge the bank with the Real Estate Bank , also headquartered in the capital, to create Emirates Development Bank , which would facilitate funding for development projects and industries, especially small and medium-sized businesses.
When the federal government's Ministerial Committee first proposed the merger last November, it envisaged that the bank would, at a later stage, also incorporate the troubled mortgage providers Amlak Finance and Tamweel .
On Monday, the Ministry of Finance signed an agreement to buy the remaining 49 per cent of EIB from entities including public institutions, banks and insurance companies.
Public institutions that sold their stakes to the government included the General Pensions and Social Security Authority and the Abu Dhabi Cooperative Society , said the Ministry of Finance.
The banks that sold their shares include Abu Dhabi Commercial Bank , National Bank of Abu Dhabi , National Bank of Dubai, Emirates Bank International , Mashreq Bank , Sharjah Bank and Arab Emirates Investment Bank .
The insurance companies involved were Abu Dhabi National Insurance Company , Al Ain Ahlia Insurance Company , Al Dharfa Insurance Company and Dubai Insurance Company.
In June 2009, the UAE Cabinet approved a draft law establishing the EDB with an authorised capital of Dh10 billion, of which Dh5 billion is to be provided by the government. "The bank is scheduled to be operational by 2010 and will be formed by the merger of the Real Estate Bank and the Emirates Industrial Bank , both of which are now 100 per cent government owned," the statement said.
The EDB 's objective is to complement existing financial services and commercial banks, the Ministry said.
"The EDB intends to partner with fund providers and banks within each emirate for government housing schemes along with social and developmental projects. As part of this mandate, it will assist in funding 40,000 houses for the UAE national, under the Shaikh Zayed Housing Programme."
By Issac John
© Khaleej Times 2009
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