Dubai Islamic Bank (DIB) has completed the acquisition of rival Noor Bank to create a lender with total assets exceeding Dhs275bn, it was announced on Thursday.
The transaction, structured through a share swap, saw DIB issue 651,159,198 new shares to take its issued share capital to 7,240,744,377 shares. The new DIB shares have been listed and admitted to trading on the Dubai Financial Market (DFM).
In line with the acquisition process, Noor operations will be completely integrated into DIB.
DIB’s board approved the proposed deal in June, and the bank secured regulatory clearance from the UAE Central Bank in November. DIB shareholders also approved it in December.
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 Ibrahim Al Shaibani, chairman of DIB said: “The acquisition of Noor Bank is a landmark achievement, establishing DIB as one of the largest Islamic banks in the world and amongst the largest banking entities in the UAE. In line with our strategy, the completion of this deal means that we remain ideally positioned to expand our footprint in the region and beyond.”
As the acquirer, DIB said it is “committed to ensuring that the transition is seamless for customers of both banks”.
The acquisition and the ensuing integration is expected to generate “significant synergies” with profitability and returns for the shareholders in the coming years, the statement added.
Adnan Chilwan, DIB group CEO, said: “The UAE is recognised as the epicentre of the Islamic economy and the completion of this acquisition will undoubtedly strengthen Dubai’s role as a global hub for Islamic finance, allowing greater investment and growth in key sectors such as infrastructure, innovation and services.
“We are set to consolidate our position as one of the largest Islamic banks in the world.”
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.
That follows the combination of National Bank of Abu Dhabi and First Gulf Bank in 2017 to create a lender with $175bn of assets.