Dubai Islamic Bank says 'no comment' on reports of Noor Bank acquisition
Potential merger would create lender with Dh275 billion in assets
Dubai Islamic Bank said on Monday it does not comment on market rumours after reports that the lender was considering acquiring Noor Bank.
Bloomberg on Sunday reported that the UAE's biggest Islamic lender has held preliminary talks with its smaller rival Noor Bank's shareholders, which are in early stages and may not lead to a deal.
"With reference to market rumour about possible acquisition of Noor Bank by Dubai Islamic Bank. Dubai Islamic Bank has clarified it does not comment on market speculations and rumours," DIB said in a statement to the Dubai Financial Market, where its shares are traded.
DIB's shares climbed 1.2 per cent to Dh5.05 at 12 noon in Dubai on Monday.
A potential acquisition of Noor Bank by DIB would create a lender with Dh275bn in assets if completed, according to Bloomberg.
A Noor Bank spokeswoman said the lender does not comment on speculations.
The Investment Corporation of Dubai is the biggest shareholder in DIB with a 28.37 per cent stake, according to the bank's website. ICD also owns 22.85 per cent of Noor Bank.
The report comes amid a series of mergers and potential tie-ups among lenders in the Middle East seeking to consolidate to improve competitiveness and boost capital.
Last week, First Abu Dhabi Bank, the UAE’s largest lender by assets, and Abu Dhabi Islamic Bank, both denied reports of merger talks. A union of FAB and ADIB would have created a lender with more than $236 billion in assets, eclipsing all banks in the Arabian Gulf and the wider region.
The consolidation drive in the GCC is expected to benefit the banking sector and may help address issues such as fragmentation in different markets while boosting asset growth and profitability, Nitish Bhojnagarwala, a senior credit analyst at Moody’s, said in March.
In the UAE, Abu Dhabi Commercial Bank is in the process of completing a three-way merger to create the third biggest banking entity in the country. ADCB will combine with Union National Bank and take over Al Hilal Bank, which will become its Islamic banking arm. Saudi Arabia's National Commercial Bank plans to tie up with Riyad Bank.
Updated: April 8, 2019 01:12 PM