By Joel Bowman
Newly-formed lender to target established players across GCC, chairman says.
Newly-formed Emirates NBD will target established players in the region as part of its aggressive plan to expand operations across the GCC and the wider Middle East, the bank’s chairman said on Tuesday.
"I think the time has come for [intra regional] bank mergers. With large assets and equity base, we are looking at regional expansion,” Ahmad Humaid Al Tayer told UAE daily Gulf News, adding, “If there are good opportunities, we are open to regional acquisitions."
Gradual branch expansion can be time consuming in generating critical minimum business, according to Al Tayer, who stressed the importance of acquisitions in reaching out to some of the key markets in the GCC, such as the Saudi Arabia.
Al Tayer said he expects its recent merger between Emirates Bank International (EBI) and National Bank of Dubai (NBD) to precipitate further such activity in the region.
"It [EBI-NBD merger] will trigger a lot more mergers in the region. Other players will now realise that size is very important in competing with big regional and international players," Al Tayer was quoted as saying by Gulf news.
With approximately 165 billion dirhams in assets, Emirates NBD plans to use its size and the changing trend in the region’s banking sector to take full advantage of the opportunities in the booming Middle East.
"In the past, heads of state of the GCC had agreed on cross border mergers… But during the past few years banks have started opening branches across the region. A further step in this direction would be cross border mergers and acquisitions in the banking industry," he said.
Emirates NBD - created after shareholders of Emirates Bank and NBD approved a deal brokered by the Dubai government last month - will harness its increased capital assets to compete more effectively with regional and international rivals, he added.
The Dubai government owns 56% of Emirates NBD.