Dubai Islamic Bank to acquire Noor after shareholders approve deal

Dubai Islamic Bank (DIB)’s shareholders have approved the recommended acquisition of Noor Bank, the lender announced on Wednesday following its general assembly meeting.

The acquisition will make DIB one of the largest Islamic banks in the world with total assets exceeding Dhs275bn, a statement said.

The deal will see DIB’s capital increase from 6,589,585,179 shares to 7,240,744,377 shares in line with the approved share swap ratio of 1 new share in DIB for every 5.49 Noor Bank shares. This translates into an issuance of 651,159,198 new DIB shares.

DIB’s board approved the proposed deal in June, and the bank announced last month that it also secured the regulatory clearance from the Central Bank of UAE.

Read: Dubai Islamic Bank board approves plan to acquire Noor Bank

State-owned Investment Corp of Dubai (ICD) is a common shareholder in both the banks, with a 28.37 per cent stake in DIB and a stake of more than 22.7 per cent in Noor Bank.

Mohammed Al Shaibani, chairman of DIB, said: “DIB is now the UAE’s biggest Islamic lender with Dhs230bn of assets as of September 30, 2019 and, with the acquisition of Noor Bank, we are on track to expand our footprint in the region and beyond.

“Completion of this deal will provide opportunities for economic growth, ensuring that the UAE’s financial sector remains at the forefront of the Islamic economy.”

Adnan Chilwan, Group CEO, Dubai Islamic Bank, added: “We anticipate that integrating the two operations will generate significant synergies, leading to improved efficiencies and greater contribution to profitability with positive impact on shareholder returns.”

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 merged earlier this year to create the third largest UAE lender with $110bn in assets.

Read: Abu Dhabi banks ADCB, UNB and Al Hilal merge to create third largest UAE lender

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