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Structure of EDB is complete
ABU DHABI — A government panel setup to supervise the merger of country’s two development finance institutions into a much-bigger entity named as the Emirates Development Bank (EDB) has completed its task of finalising the new institution’s organisational structure.
The bank being launched will lend money to the UAE nationals for building houses, setting up industries and venturing into small and medium enterprises.
The new bank was created through the merger of the Emirates Industrial Bank (EIB) and the Abu Dhabi-based the Real Estate Bank in June last year.
The draft law has fixed the paid up capital of the new venture at Dh10 billion, to be raised in phases. At present, the paid up capital is Dh2.3 billion, which will be increased to Dh3 billion as Dh700 million funding will be allocated in the federal budget 2011-13, said Younis Haji Al Khouri, director-general of the Ministry of Finance, while speaking to reporters in Abu Dhabi.
In the next three years, the capital will be further increased to Dh5 billion, with money coming from annual budgetary allocations, he said.
The Emirates Industrial Bank was the nation’s only development finance institution dedicated to financing to the industrial sector.
In 2009, EIB studied 34 industrial projects, out of which 27 projects were given finance amounting to Dh274.50 million. EIB’s total lending touched Dh4.860 billion disbursed to 640 projects since its inception in 1982, according to the bank’s Website. The Real Estate Bank had the mandate to finance housing needs of the UAE nationals especially under the Shaikh Zayed Housing Programme, according to its Website. It disbursed Dh3.572 billion in loans in seven years ending 2007. The bank also earned a profit of Dh85 million in that year. The realty bank had assets worth Dh3.9 billion in 2007.
The director-general said that the “high-level committee has completed laying the procedural and the operational rules and regulations of the bank and has decided on its capital, operations and number of branches to be setup in the country.”
The Federal Government has already purchased all the private sector shares in the Emirates Industrial Bank, to pave the way for its full ownership of the newly created bank.
The talks on the merger of Amlak and Tamweel are absolutely separate, he stressed.
The director-general described the establishment of the bank as an “important” step to building strong and sustainable businesses in the country.
Al Khouri said that the initiative will open new venues for financing the industrial sector and will also support the small and medium enterprises. The bank, to be headquartered in Abu Dhabi, will be a joint stock company with nation-wide branch network.
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