Currently, there are 54 banks operating in the country. In addition, there are many banks that operate out of the Dubai International Financial Centre (DIFC).
Nelson told Gulf Business that consolidation or in-market mergers will allow the banks to diversify their income streams, as it will help them reduce costs and concentrate on offering enhanced banking services.
Emirates NBD was formed in 2007 with the merger of Emirates Bank International and National Bank of Dubai.
Nelson said: "Emirates NBD is an example of where we had two good mid-size banks create a regional champion and we need more of that going forward.
"If you really want to get economies of scale and the capability to diversify your earnings, you need size and capital.
"And mid-size banks are going to find that difficult because what they can buy will be quite limited for the amount that they can put forward."
Image: Several individual banks operate out of the Dubai International Financial Centre in Dubai. Photo: courtesy of DIFC.
