Gulf merger mania has Dubai Islamic Bank on the lookout for deal

The merger mania in Gulf hasn’t presented the perfect match for Dubai Islamic Bank just yet. “There’s always an opportunity for a mega deal in conventional or Islamic banking - it just needs to make commercial sense,” chief executive officer Adnan Chilwan told Bloomberg TV. “We’ll always be on the look as an acquirer to see if we can look to pick up a potential target, but nothing on the cards right now.”

Three of Abu Dhabi’s state-linked banks are in talks to combine into an institution with $110bn of assets. The negotiations follow a tie-up between Abu Dhabi’s two biggest banks last year and the merger of sovereign wealth funds in March.

Dubai’s government is one of the biggest shareholders in Dubai Islamic Bank, the largest Shariah-complaint lender in the UAE. When asked if the government is pushing the bank to do a deal, Adnan said: “The government is very pragmatic. They make sure that transactions, if any, should be looked at commercially and we do not do mergers in Dubai for the sake of mergers.”

In Saudi Arabia, HSBC Holdings Plc’s unit in October agreed to buy a local rival part-owned by Royal Bank of Scotland Group Plc in a $5bn deal to create the kingdom’s third-largest lender. Chilwan also said, expansion “can be a combination of organic and inorganic. In certain markets we have done brownfield operations and in other markets it has been greenfield. So there are a lot of combinations and it can be a mixture of both organic and inorganic growth.” “We are on track to achieve guidance of loan growth 10-15%. We have been outperforming our peers and that means we’ve been gaining market share,” he said.