Dubai Islamic Bank is set to become one of the most powerful Shariah banking leaders in the region as its board approved the acquisition of Dubai smaller rival Noor Bank. The bank’s board has recommended acquiring 100 percent of Noor Bank.

With the acquisition, Dubai Islamic Bank will become one of the largest Islamic banks in the world itself with combined assets worth $76 billion or Dh278 billion. A money manager at Shuaa Capital told Bloomberg that DIB may pay 0.8 to 0.9 times book value for Noor Bank shares.

Dubai Islamic Bank said in a statement that the acquisition will lead to cost efficiencies, contribute to profitability, and help DIB offer competitively priced products and services across a more diversified portfolio. DIB also expects the acquisition to  accelerate digitisation and drive innovation.

The bank told the Dubai Financial Market in a statement that it will complete all legal processes for the completion of the deal. The Dubai lender did not specify when shareholders will vote on the deal or when it will complete the evaluation process.

Adnan Chilwan, group CEO of Dubai Islamic Bank said that the bank hopes to accelerate the growth and popularity of Islamic finance across the region and beyond with the deal. He also told the regional media that the acquisition of Noor Bank was in line with Dubai Islamic Bank’s strategy that strikes a fine balance between shareholder interests and market dynamics.

Mohammed Al Shaibani, the chairman of DIB, said in a statement: “Innovation and service excellence sit at the very heart of our business and this will continue as we build scale through this acquisition and develop fresh new ways to improve the banking experience for our customers. In addition, this announcement will provide opportunities for economic growth and prosperity across the region, ensuring that the UAE’s financial sector remains at the forefront of the Islamic economy.”

Investment Corporation of Dubai, Dubai’s main state-owned holding company, owns 28 percent in DIB. The holding company is also one of the largest shareholders in privately-owned Noor Bank also.