The chances of Noor Bank’s acquisition by Dubai Islamic Bank’s (DIB) are high, an analyst told Zawya. The acquisition can increase DIB’s market share in loans and deposits by two percent, the agency reported.
While Noor Bank is available at a discount, the merger and acquisition helps DIB consolidate its position while cleaning the books of both banks. DIB had said in a statement earlier this month that it is regularly looking out for expansion opportunities through merger and acquisitions.
DIB has informed the Dubai bourse that its board of directors has decided to allow the “bank to explore possible acquisition of Noor Bank and revert to the Board with findings within three weeks.” The UAE’s largest Shariah compliant lender will also appoint financial advisers to conduct due diligence and valuation of Noor Bank.
The Investment Corporation of Dubai (ICD) owns 28.37 percent in DIB and more than 22.7 percent of Noor Bank. According to the bank’s website, the Government of Dubai, members of the Ruling Family of Dubai, and a select group of UAE nationals nominated by the Government of Dubai hold 88.3 percent in total of the bank.
DIB reported a net profit attributable to shareholders of Dh1.34 billion in the first quarter of 2019, an increase of 15 percent from Dh1.17 billion earlier. Total income increased 26 percent to Dh3.4 billions in Q1. The bank had assets worth $226.5 billion at the end of the last quarter, an increase of 1.3 percent.