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Government takeover of Dubai Bank will lead to more mergers?

Dubai BankDubai Government has taken over Dubai Bank with immediate effect.

The action was taken under the directions from His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of UAE, Ruler of Dubai.

According to a statement, the Government of Dubai had to takeover Dubai Bank to ensure the preservation of all of Dubai Bank’s depositors’ interests. The Government will also inject adequate capital into Dubai Bank.

The injection will effectively dilute the complete holding of Dubai Bank’s current shareholders, and consequently allow the 100 per cent takeover of the bank by the Government of Dubai. Before this acquisition Dubai Bank was jointly owned by Dubai Holding and Emaar at 70 and 30 per cent, respectively.

The Central Bank of the UAE and the Ministry of Finance have extended their support to Dubai Governments’ initiative.

The management team at Dubai Bank will not be affected by the takeover and will remain in place without any changes, the statement said.

This may further lead to a merger of Emirates Islamic Bank (EIB) and Dubai Bank. In the proposal presented to the Central Bank, EIB had put up a condition that it wouldn’t shoulder any losses suffered by Dubai Bank. EIB had then stipulated that the government should handle Dubai Bank’s losses, which it estimated could range between Dh500 million and Dh2 billion.

According to another report, Emaar Properties will fully write off its investments in Dubai Bank, valued at Dh172 million. This is to further solidifies governments takeover of Dubai Bank.

Dubai selling Holiday Inn Express portfolio? Fact or Speculation?

Holiday Inn ExpressInterContinental Hotels Group, owner of the Holiday Inn Express brand, has dismissed market talk its partner Dubai International Capital is to sell the four hotels it operates in the emirate.

The four Holiday Inn Express hotels, operated under a joint partnership between DIC and Ishraq Dubai LLC, were being touted to buyers as part of an asset sale, the UK’s Financial Times said.

Dubai International Capital (DIC) is a subsidiary Dubai Holding, the government-owned investment company currently seeking to restructure around $9bn in debt.

DIC and Ishraq Dubai had planned to open 20 hotels across the Gulf, however the expansion was put on hold following the global economic crisis.

Dubai Holding is believed to be looking to sell off some its assets to fund its repayments.

From: Arabian Business

Tourists in Dubai to get a free mobile SIM

UAE banks hike credit card, account maintenance and other charges

As the New Year approaches, the UAE banks are revamping their account maintenance and credit card fee structures with some of them introducing new fees.

Standard Chartered bank has revised its account maintenance with effect from December 1, 2010. The fee has been hiked by 25 per cent to Dh250 per month from earlier Dh200 if the balance falls below Dh10,000.

Recently, Dubai Holding owned Dubai Bank announced that it would levy Dh4 per month as SMS banking fee.

Earlier, Royal Bank of Scotland (now Abu Dhabi Commercial Bank or ADCB) announced that it would charge Dh10 per month as maintenance fee for credit cards which it had previously announced as “free for life”..

ADCB has increased a number of fees for its Etihad Guest card, including both over limit charge and late payment fee to Dh189 from Dh150. It also hiked process fee for non-dirham transactions from 2.75 per cent to 2.99 per cent and credit shield fee.

The bank also hiked Lulu Co-brand and Meethaq credit card fees and introduces new charges. It increased finance charges for Platinum and Infinite cards to 2.99 per cent per month from 2.79 per cent while processing has also been hiked to 2.89 per cent from 2.75 per cent. Similarly, Dh189 will be charged for late payment against Dh150 earlier.

It also levied new Priority Pass Card Replacement fee of Dh150 for Gold and Platinum credit cards from January 1, 2011.

National Bank of Abu Dhabi also revised its interest rates, cash advance fee and minimum monthly repayment fees for credit cards from November 1, 2010.

The banks have been under pressure to boost their revenues as provisions are on the rise over the past two years due to growing non-performing loans following global financial crisis.

From: Emirates24|7