Dubai Islamic Bank responds to reports of acquiring Noor Bank

Dubai Islamic Bank has issued a clarification regarding media reports that it is mulling an acquisition of Noor Bank.

“Dubai Islamic bank has clarified that it does not comment on market speculations and rumours,” the bank said in a brief bourse statement.

Bloomberg reported the news on Sunday, citing unnamed sources as stating that Dubai Islamic Bank has held “preliminary discussions” with Dubai-based Noor Bank’s shareholders for the acquisition.

“Discussions are at an early stage and may not lead to a deal,” it added.

The report also claimed a potential acquisition would create a lender with Dhs275bn ($75bn) in assets.

Reuters also cited sources as stating that discussions were at a “shareholder level”.

Dubai’s sovereign fund Investment Corp of Dubai (ICD) – which owns 28.37 per cent of Dubai Islamic Bank and more than 22.7 per cent of Noor Bank – will likely make a decision on any successful deal, the report said.

The UAE, which has 50 commercial banks including 22 local lenders, is seeing a wave of consolidations in the market as banks seek to increase capital due to slowing economic growth.

Three of Abu Dhabi’s banks – Abu Dhabi Commercial Bank, Union National Bank and Al Hilal Bank are currently in the midst of a merger.

Read: Abu Dhabi’s Al Hilal Bank cuts 160 jobs ahead of three-way merger – sources

That follows the combination of National Bank of Abu Dhabi and First Gulf Bank in 2017 to create a lender with $175bn of assets.

The UAE Banks Federation said in an annual report released in August last year that the sector was still ripe for consolidation given the large number of lenders serving the country’s 9.54-million population.