National bank of Dubai and Emirates Bank


The National bank of Dubai was the pioneer compared to Emirates Bank and was formed in the year 1963. The total asset held by the National bank of Dubai is about AED 6.9 Billion with about 39 branches within UAE ranking 4th largest bank by assets.

Emirates bank was formed in the year 1977 with a total asset of AED 9.5 Billion with about 35 branches in UAE. Both the government banks were leading banks doing excellent in this region. Both the banks had decided to go merger in order to become the largest bank in the middle-east and the main purpose is to overcome one of the largest bank in this region. This merger was expected to be a very strong bank and to be distinct from various local banks. They also target to be globally recognized as the leading and most dynamic financial services provider based in Middle East. The Dubai government owns around 14 percent of National Bank of Dubai, the emirate's fourth largest lender by market value, and about 77 percent of Emirates Bank, the biggest lender in Dubai.

"The merger is expected to create one of the largest financial services institutions in the Middle East and a systematically important bank in Dubai. The merged entity will possibly display strong financial performance, robust capitalisation, sound liquidity, and a well-diversified funding mix.

Though the name, sector and business diversification increases, the merged entity will remain a domestic bank by nature. The S&P's analyst said synergies are expected to be sizeable, as the two merging institutions have so far had different business models.

"EBI has been very much entrenched in the domestic corporate and retail markets, and has developed good business diversification out of pure lending”; “NBD has been more focused on corporate banking, and has been a late, but successful, entrant in retail and investment banking, as well as operating in private banking fields”. The merged entity should be having a number of complementary areas on which it has to capitalise, while at the same time curbing operating costs and strengthening support functions such as risk management, IT, audit, and compliance, which have all assumed an unprecedented level of importance in both the UAE and the Gulf region as a whole."


Further from the economy downturn, markets were very volatile especially in Nov-09 when Dubai was in heavy debt on many government bonds. Whereas the outlook of the region for the year 2010 looks fairly good and IMF estimates 5% GDP growth rate in Middle East and North Africa due to the oil prices that hovering from $70 – 80 billion / barrel. Though during the merger the country's economy was not in a good shape slowly it started changing to see a upward trend.


n Emirates Bank International merged with National Bank of Dubai on Oct 6th-2007.

n The merger led to the creation of a new vehicle (Emirates NBD), and also made it the largest bank in the middle-east.

n To gain economies of scale and get rid of duplication of activities.

n Capitalize on Economy Boom & to get highlighted on the world map.

n Ambition to be amongst the top 100 banks by 2010.

n Significantly enhanced distribution network in the UAE

n Significant strengthening of competitive positioning

n Highly diversified business mix

n Corporate/retail banking powerhouse

n Strategically positioned to capitalize high growth potential of domestic and regional markets

n Significant cost and revenue synergies dynamic value creation

n Targets are motivated but achievable based on precedent transactions

n To expand Islamic banking

n Integrate both the organizational resources to build a scalable platform.


· Emirates NBD's dream is to get globally recognized as the leading and most dynamic financial service provider based in the Middle-east.

· To become a leading financial institution in the local region with an increasing international presence.

· To leverage financial strength, scale and market positioning to capture domestic and regional opportunities.

· To become the partner of choice for corporate and retail clients seeking financial services in the GCC.


In the first year of merger (9 months) the new company Emirates NBD had a profit of 14% increase compared to the last year. The group has over 100 Branches. It has a presence in the UAE, Saudi Arabia, Qatar, the United Kingdom and Jersey (Channel Islands), and representative offices in India, Iran and Singapore. Emirates NBD has won various prominent banking awards. In 2008 the group was awarded UAE Bank of the Year for 2008 by The Banker Magazine. Also, Best Bank in the UAE and Best Trade Finance Provider Awards for the Year 2007 by Global Finance Magazine.


Though the synergy is created on the merger there were be lot many lay-offs in various areas where staff redundancy is recognised and duplication of work is being eliminated. There were serious value destruction, i.e. where integration experience of managers is contrary to expectations, they feel they stand to lose and the newly formed company requires leadership vacuum from the top management. Emirates bank had an upper hand in this process as they hold the major number of assets in comparison with NBD.


In 2008, the Human Resources department's key objective was to provide strategic support to the management, facilitating the smooth integration of the people and cultures of the two legacy banks. The department achieved effective delivery of integration initiatives relating to pay policies, recruitment for new roles and the launch of Emirates NBD's core values. The smooth transition of the people side of the business has enabled employees to focus on the bank's new aspiration and strategy.

n Legal Issues

n Rationalization of Salaries: Variation in the job responsibilities, different salary structure, departmental cost budget variation after integration was a major problem

n Match Benefits: The benefits of the both the employees were tried to match reasonably in the new merged organization

n Performance Evaluation: The mix of both the bank employees had lot of changes and shifts in the team, individual staff after the restructuring. This would be one of the major problem where the staff who are designated to work in the new areas may not have the expertise in that particular area and more over the boss himself would be a person wearing a new hat and it's a difficult task to evaluate the performance of his subordinate who is not known to him.

n Cultural Issues-Different style of working: There is a huge difference in the working style as NBD had lot of young staff with creativity who are amicable in nature whereas Emirates bank on the other hand had senior and rigid behavior. Even the department structures had a great variation where the NBD hierarchy and the team structures were very good compared to Emirates bank

n Redundancies: By way of eliminating the unwanted work or duplication of work, the bank gains due to merger as the repetitive functions and activities and streamlined resulting in redundancies leading to job cuts. Same way the gaps in both the companies can either way be filled in by the respective banks.


IS integration is a critical as the compatibility between merging companies must be seriously considered even at the pre-deal or due-diligence stage. 2008 was a year of integration for the information technology and operations divisions of the bank. All key functions, services, people and processes were integrated, with core services still undergoing process improvements as we move into 2009. 2008 also witnessed the implementation of critical applications for the Bank, in particular a loan management system, FinnOne, a new core banking platform, Finacle, as well as the launch of a revamped general ledger system, Oracle financials. Since the integration of multiple modules of various department has to be monitored as there would teething problems being faced the way its working The integration of these 2 different system into a new system has gone live and is successful after 2 years of tremendous efforts of Information Technology & system integration experts.


n Vision à Local to Global

n Emphasis à Team Building activities

n Promote à Fostering of Ideas

n Culture à Amalgamation

n Elude à Conflicts

n Effective à Communication


When there is a combined force of two companies creates more value than the value of the separate firms then the value of individual separate firms.

Quantifying the Operating Synergies in the new Emirates NBD would take some more as still the integration of teams, process and staff lay-off are to be done. Post integration settling all teething problems the management would be able to focus on the cost reduction in marketing, purchasing and various operations and the revenue enhancement (increased market share) eliminating duplication of work. Financial synergy would have been already been utilizing the assets effectively and duplication of assets can be eliminated and the equivalent cash resources can be deployed in some form of investment.


The Offer price to the shareholders and the investors is 14% premium to the prices on the day prior to announcement. NBD's Share price of AED 8.84 and EBI's share price of AED 9.30 together were made as AED 13.75 in July 2007. The merger of EBI and NBD were a consolidation type where both the old companies does not exists rather they form a new stronger companies.


Though there is no much cultural change between Emirates bank and National bank of Dubai at an outward look as both are nationalised banks of United Arab Emirates. Whereas, within the organization the cultural practices and the HR practices and procedures, Employee policy, Salary levels, Management perspective and the Customer groups does vary to a great extent. Hence it is going to be a difficult task for the Human resources management section of the new company to follow a standardized policies and procedures applying it on the staff and in exchange the staff should also feel comfortable without compromising their rights and benefits. As the age differences in both the banks (Emirates bank – little aged staff group) & (National bank of Dubai – young staff) will not get along together due to egocentric behaviour and moreover the working style and methodology, commitment, loyalty, creativity varies and its difficult to have a smooth transition / integration of staff together.

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