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.

The post Dubai Islamic Bank to become top Shariah bank with Noor acquisition appeared first on International Finance.

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.

The post Noor Bank acquisition: DIB can increase market share in loans, deposits by 2% appeared first on International Finance.