Dubai Islamic Bank mulls acquisition of rival Noor Bank
DUBAI: Dubai Islamic Bank PJSC, the United Arab Emirates’ biggest Islamic lender, is weighing the possible acquisition of its smaller rival Noor Bank PJSC.
The board had resolved to allow the bank “to explore the possible acquisition of Noor Bank and to revert to the board with findings within three weeks”, it said in a statement to the stock market.
The board also allowed the bank to hire financial advisers for due diligence and provide an opinion on the valuation.
Dubai Islamic Bank held preliminary discussions with Noor Bank shareholders, said people familiar with the matter earlier this month. The acquisition would create a lender with 277 billion dirhams (RM311.36 billion) in assets.
The Middle East’s financial services industry is witnessing a wave of consolidation as banks seek ways to improve competitiveness and boost capital amid slowing economic growth.
Abu Dhabi is in the process of merging three of its banks after combining two of its biggest lenders in 2017.
Dubai Islamic Bank shares climbed as much as 1.2 per cent after the statement, taking gains this year to four per cent. The lender reported a 14 per cent rise in first-quarter profit to 1.34 billion dirhams, beating the median of two analyst estimates compiled by Bloomberg.
Investment Corp of Dubai, the emirate’s main state-owned holding company, is the largest shareholder in Dubai Islamic Bank with a 28 per cent stake.
Dubai Islamic Bank had assets of 224 billion dirhams at the end of last year compared with Noor Bank’s 51 billion dirhams, according to data compiled by Bloomberg.
More than 50 banks compete for a share of the domestic market, including the local units of HSBC Holdings Plc, Standard Chartered Plc and Citigroup Inc.