Dubai’s Sheikh Ahmed takes top job at Emirates NBD

Dubai's ruler named his uncle and close advisor Sheikh Ahmed bin Saeed al-Maktoum as chairman of Emirates NBD on Sunday, in a move that may signal changes to come in Dubai's banking sector.

Sheikh Ahmed, chairman of Emirates airlines and uncle to Dubai's ruler, replaces Ahmed Humaid Al Tayer, who is also governor of the Dubai International Financial Centre (DIFC), state news agency WAM said.

The two men also helm Dubai's Supreme Fiscal Committee and were key figures during the emirate's debt crisis.

"It's an interesting change, it's a change that the market was not expecting," said Mohammed Ali Yasin, chief investment officer at CAPM Investments in Abu Dhabi.

"This could be signalling this summer will not be a dull summer after all. This could be signaling a new set of changes, going through local departments whether in Dubai or Abu Dhabi."

WAM said Hisham Abdullah Al Kasem was named ENBD's deputy chairman, replacing Abdullah Mohamed Saleh, who resigned from the post in May.

Three other members of the bank's board of directors were also replaced by Mohammed Obaid al Shehhi, Mohammed Hadi Ahmed Abdullah al Husaini and Shoaib Mer Hashim Khouri.

Dubai’s government owns a 55.6 percent stake in Emirates NDB, which was created in the 2007 merger of two local banks by order of Dubai's ruler.

The appointment of Sheikh Ahmed, a respected businessman who helped steer Dubai through its debt crisis, will lend stability and credibility to the changes, observers said.

Sheikh Ahmed also took the helm of debt-laden conglomerate Dubai World as chairman in December, as Dubai bid to rebuild its tarnished brand name after the debt debacle.

Revamping the board of Dubai's largest bank by market value, could show that the government is setting its sights on changes within the emirate's banking sector, said Abdul Kadir Hussain, chief executive of Mashreq Capital.

"People change senior management and board because they want things to move in another strategic direction," Hussain said.

"The general view is that Dubai's banking sector is overbanked and if you were to get some consolidation, then you could get some critical mass in terms of balance sheet."

Hussain said there were issues in Dubai's banking sector that need to be resolved, including the fate of troubled Islamic lender Dubai Bank, which was taken over by Dubai's government in May.

Talk has swirled that Emirates NBD's Islamic arm, Emirates Islamic Bank, could step in to buy Dubai Bank. The government said in May it was considering whether to continue running Dubai Bank on a stand-alone basis or merge it with another state-owned bank.

Separately, WAM said Sheikh Ahmed stepped down as chairman of Noor Islamic Bank. He will be replaced by Sheikh Ahmed bin Mohammed bin Rashid al Maktoum.

Noor Islamic had also had been touted as a possible candidate to absorb Dubai Bank, but the speculation was denied by Sheikh Ahmed in a statement last month.