Dubai Islamic Bank PJSC, the United Arab Emirates’ biggest Islamic lender, is considering buying its smaller rival Noor Bank PJSC, people with knowledge of the talks said.
The bank has held preliminary discussions with Dubai-based Noor Bank’s shareholders, said the people, asking not to be identified because the information is private. Discussions are at an early stage and may not lead to a deal. The acquisition would create a lender with 275 billion dirhams ($75 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. Banks in Saudi Arabia, Kuwait and Bahrain are also holding merger talks.
Investment Corp. of Dubai, the emirate’s main state-owned holding company, is the largest shareholder in Dubai Islamic Bank with a 28 percent stake. It’s also one of the biggest investors in Noor Bank, a lender set up in 2008.
Dubai Islamic Bank had assets of 224 billion dirhams at the end of 2018 compared with Noor Bank’s 51 billion dirhams, according to data compiled by Bloomberg.
Dubai Islamic Bank said Monday it doesn’t comment on speculation or rumor as did a spokeswoman for Noor Bank. Investment Corp. of Dubai didn’t immediately respond to a request for comment.
Dubai Islamic Bank’s shares climbed to their highest level in more than three weeks. They were up 1.4 percent at 5.03 dirhams at 10:09 a.m. in Dubai.
Source Bloomberg