The UAE has launched a state-owned bank on Wednesday to finance housing and other projects for UAE citizens, in a fresh round of intervention to promote the government's social policy objectives.

The Emirates Development Bank (EDB), headquartered in Abu Dhabi, was created by the merger of Emirates Industrial Bank and Emirates Real Estate Bank.

It was officially inaugurated by Sheikh Mansour bin Zayed Al Nahyan, the Deputy Prime Minister and Minister of Presidential Affairs of the UAE.

Obaid Humaid Al Tayer, Minister of State for Financial Affairs, Sultan Bin Saeed Al Mansoori, Minister of Economy, Abdullah Belhaif Al Nuaimi, Minister of Public Works, Ahmed Mohamed Al Humairi, secretary general of the Ministry of Presidential Affairs, and Mubarak Rashid Al Mansouri, Central Bank Governor attended the opening ceremony.

Speaking at the launch, Sheikh Mansour said it was a key addition to the banking sector in the UAE that will boost overall growth of the economy and provide Emirati people with services that help them achieve key milestones in their lives, such as owning their own homes, in addition to supporting Emirati entrepreneurs and the SME (small and medium enterprise) sector.

In the last several years, the government has stepped up efforts to ensure social peace by providing housing and jobs to UAE citizens, who account for only about one million of the country's total population of roughly eight million.

With an authorised capital of Dh10 billion ($2.7 billion), the EDB will allocate Dh5 billion ($1.36 billion) to financing housing, industrial and other schemes for UAE nationals, the bank said on Wednesday.

Speaking at the launch, EDB chairman Khaled Mohammed Salem Balama, said the bank would play a vital role in furthering the economic growth of the UAE and improving the opportunities and life choices for its citizens.

"EDB has the ability to help shape our nation’s future, empowering Emiratis who aspire to take possession of their own home while also supporting key areas of the economy, particularly the innovative and entrepreneurial SME sector," he added.

The EDB officials said housing was a strategically important focus area for the bank, and helping Emiratis to own their first home, either directly or in partnership with government housing programmes, was its key objective.

It plans to provide low-cost housing finance to around 30,000 UAE citizens by 2021. It will also allocate Dh500 million ($136 million) to a credit guarantee scheme with other banks that will support local owners of small businesses, which the government hopes will create private sector jobs for citizens.

The EDB joins 23 local banks and 28 foreign banks in the UAE; the government owns major stakes in many of the local institutions.

Rashid Mahboob, the acting CEO said: "The success of launching EDB’s operations will provide impetus to the bank as we commence our journey, driving development in our nation, our economy and our community. We are proud to be pioneering a positive change in the UAE, partnering with the government to ensure the long-term success of our great nation."

“The strength of our team will allow us to support the economic development agenda of the UAE while remaining an independent and financially sustainable bank. We are excited about our future prospects both supporting aspirational Emiratis and making a real positive difference in the economy," he added.-Reuters and TradeArabia News Service