The option to merge three Islamic banks - Emirates Islamic Bank, Dubai Bank and Noor Islamic Bank - is being considered, with the idea that the merged entity will then bail out Amlak Finance, a source told Emirates 24|7.
“As far as we understand, there is a proposal to merge the three Islamic banks, who will then bail out Amlak,” the source said on condition of anonymity.
“The merger of the three entities will create an Islamic bank of substantial size, which can then bail out Amlak. Emaar is unlikely to put more money into Amlak,” he added.
In early October, reported Dubai Bank and EIB were holding merger talks in order to create a large Shariah-compliant bank in the emirate.
The move is part of the new economic vision of the Government of Dubai to integrate small and medium-sized banks so that they are able to compete and keep pace with the new developments and challenges taking place in the industry, the source said.
EIB is 99.8 per cent controlled by Emirates NBD, while the government of Dubai holds about 29.8 per cent of Dubai Bank, which is controlled by the Dubai Banking Group, an affiliate of Dubai Holding. Noor Islamic Bank is 25 per cent owned by Dubai Group, a subsidiary of Dubai Holding, and 25 per cent owned by the Investment Corporation of Dubai.
Last month, Dubai Islamic Bank said it had increased its shareholding in the UAE’s other major mortgage lender Tamweel to 57.3 per cent.
Trading in the shares of Tamweel and Amlak have been suspended for sometime now, pending their restructuring.