Tuesday, Jul 14, 2020
International Finance
Islamic Banking

Dubai Islamic Bank weighs in on Noor Bank acquisition

Dubai Islamic Bank Noor Bank
The board of directors are expected to meet on November 25 to discuss the possible acquisition

Dubai Islamic Bank (DIB), which is one of the largest Islamic banks in the world, is weighing in on a possible acquisition of UAE’s Noor Bank, the former said in a statement.

The board of directors of Dubai Islamic Bank are set to meet on November 25, 2019, to discuss the possible acquisition of Noor Bank.

The news of a possible acquisition of Noor Bank by Dubai Islamic Bank first came out earlier this year. Reportedly, the board of directors of Dubai Islamic Bank held a meeting in the month of June as well and gave its approval with regard to the acquisition, however, no decision has been taken as of yet.

According to Maria Elena Ponceca, a senior analyst at Al Ramz Capital, Dubai Islamic Bank wants to further consolidate its domestic prominence by acquiring Noor Bank to increase market shares in loans and bank deposits by roughly 2 percent each.

She told the local media, “It would make economic sense, especially if Noor will be acquired at an attractive discount and Dubai Islamic Bank takes advantage of the potential consolidation by further cleaning the books of both banks,”

If Dubai Islamic Bank acquires Noor Bank, the combined entity will be one of the largest and most influential Islamic finance institutions in the world. It would have a market share of 10 percent with assets worth Dh275 billion.

Last month, Noor Bank reported a 12 percent drop in its net profit for the third quarter of 2019. The drop in profit is due to higher impairment charges as well as a reduction in income from Islamic financing.

Currently, there are six standalone Islamic banks operating in the UAE, which are Dubai Islamic Bank, Emirates Islamic, Noor Bank, Abu Dhabi Islamic Bank, Sharjah Islamic Bank, and Ajman Bank.

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