Dubai’s media office said Sheikh Mohammed bin Rashid Al Maktoum ordered Emirates NBD to acquire its smaller rival as part of government “efforts to enhance the banking sector in the emirate.”

“Dubai Government is keen to take the necessary steps to empower financial institutions to fully operate in a way that serves the national economy and consolidate the country’s position as a first-class international financial hub,” it said.

Financial terms were not disclosed.

Rick Pudner, CEO of Emirates NBD, said the deal wouldn’t have a major impact on the company’s balance sheet because of state assistance the lender received as part of the deal.

“The Dubai government is fully supporting the takeover,” he said.

Dubai’s government unexpectedly took over cash-strapped Dubai Bank in May. It vowed at the time to immediately pump fresh funds into the lender, though the amount of aid hasn’t been disclosed.

Before the takeover, Dubai Bank was jointly owned by Dubai Holding and Emaar Properties.

Emirates NBD is majority owned by the government through the Investment Corporation of Dubai.

The holding company is widely seen as the healthiest of Dubai’s major state-linked conglomerates, and includes industrial powerhouses such as Emirates airline and aluminum smelter Dubal.