Emirates NBD alone holds 20pc
Six large banks in the UAE control close to 60 per cent of the total assets held by the country’s banking sector which has more than 50 banks.
While the total assets of the banking system in the UAE is AED337 trillion as of March end this year, banks such as Emirates NBD, National Bank of Abu Dhabi (NBAD), ADCB, Mashreq, Dubai Islamic Bank (DIB) and First Gulf Bank (FGB) together hold AED801.946 billion worth of assets.
The largest bank in the country, Emirates NBD, the bank created through the merger of Emirates Bank and National Bank of Dubai (NBD) alone controls Dh277.464 billion worth of assets which is more than one-fifth of the total assets held by the UAE banks.
While NBAD holds Dhl57.231 billion worth of assets (11.75 per cent), that held by ADCB are to the tune of Dhll3.99 billion. Mashreq,Â Â FGBÂ Â andÂ Â DIBÂ Â hold assets to the tune of Dh83.367 billion, DhS4.810 billion and Dh85.083 billion respectively as of March 31, 2008.
The concentration of assets points to the fact that it makes better sense for the medium to small banks to merge and become larger in order to stay in the market which is controlled by a few big banks. The analysis also proves that the larger banks enjoy a better equity multiplier ratio or leverage index as they have been able to leverage their capital more effectively than many other medium to small banks.
While Emirates NBD has leveraged its equity of Dh24.680 billion 11.24 times to take its asÂ¬set base to Dh277.464 billion, NBAD’s leverage index is 12.07 as of March 31, 2008 and ADCB’s is 9.68.
On the other hand, Mashreq, FGB and DIB have leverage indexes of 7.77, 8.07 and 8.96 respectively.
Earlier, Emirates NBD had said that it was aiming to achieve a market share of about 25 per cent in UAE’s banking business.