Gulf merger mania has Dubai Islamic Bank 
on the lookout for deal

By BLOOMBERG

Dubai • The merger mania in the Gulf hasn’t presented the perfect match for Dubai Islamic Bank PJSC (DIB) just yet.

“There’s always an opportunity for a mega deal in conventional or Islamic banking — it just needs to make commercial sense,” CEO Adnan Chilwan told Bloomberg TV. “We’ll always be on the lookout as an acquirer to see if we can look to pick up a potential target, but there’s nothing on the cards right now.”

Three of Abu Dhabi’s state-linked banks are in talks to combine into an institution with US$110 billion (RM457.6 billion) of assets.

The negotiations follow a tie-up between Abu Dhabi’s two biggest banks last year and the merger of sovereign wealth funds in March.

Dubai’s government is one of the biggest shareholders in DIB, the largest Shariah-complaint lender in the United Arab Emirates (UAE).

When asked if the government is pushing the bank to do a deal, Chilwan said: “The government is very pragmatic. They make sure that transactions, if any, should be looked at commercially and we do not do mergers in Dubai for the sake of mergers.”

Banks in merger talks:

• Abu Dhabi Commercial Bank PJSC, Union National Bank, Al Hilal Bank PJSC

• Kuwait Finance House, Ahli United Bank BSC

• National Bank of Bahrain BSC, Bahrain Islamic Bank BSC

• Bank Dhofar SAOG, National Bank of Oman SAOG

• Alizz Islamic Bank SAOG, Oman Arab Bank SAOC

In Saudi Arabia, the biggest Arab economy, HSBC Holdings plc’s unit in October agreed to buy a local rival part-owned by Royal Bank of Scotland Group plc in a US$5 billion deal to create the kingdom’s third-largest lender.

Chilwan also said expansion “can be a combination of organic and inorganic. In certain markets we have done brownfield operations and in other markets it has been greenfield. So, there are a lot of combinations and it can be a mixture of both organic and inorganic growth”.

“We are on track to achieve guidance of loan growth at 10%-15%. We have been outperforming our peers and that means we’ve been gaining market share.” — Bloomberg