x Abu Dhabi, UAEThursday 18 January 2018

Tamweel's $100 million pricetag disclosed in financial statements

Dubai Islamic Bank revealed it paid Dh375m last year to take control of Tamweel, the Islamic home financing giant.

Dubai Islamic Bank (DIB) paid almost Dh375 million (US$102m) last year to take over Tamweel in a deal that set the stage for the resumption of business at the Islamic mortgage giant following a two-year freeze.

The transaction was completed on November 4, according to annual financial statements DIB released at the end of last week, with the bank grabbing up a 58.3 per cent stake.

The bank had said it was raising its stake in Tamweel in September without disclosing the price. The Dh374.7m DIB paid equated to around Dh1 per Tamweel share, according to Bloomberg calculations, a price some analysts said was higher than they expected.

DIB paid with Dh318.6m in cash and Dh56.1m in its own shares. "If you look at Tamweel's historical figures, most of the growth in their loan book was in 2008, just before the property crisis hit the UAE," said Shabbir Malik, a banking analyst at EFG-Hermes in Dubai.

The price, he said, was well below book value, or the value of Tamweel's net assets divided by the number of outstanding shares. Tamweel put the book value of its shares at Dh2.23 in its results for last year.

Tamweel's shares have been suspended from trading on the Dubai Financial Market since late 2008, when the onset of the global financial crisis forced it to cease financing activities.

They last traded at Dh0.99 on November 20, 2008. DIB acquired its majority stake last year from Tamweel's former main shareholders, including Istithmar World and Dubai Capital Group. Before the transaction, DIB owned 21.6 per cent of Tamweel.