Islamic bank chief refuses to rule out future merger

The CEO of Noor Islamic Bank on Thursday called for greater consolidation of the UAE’s banking sector and said he would not rule out a merger in the future.

Hussain Al Qemzi told Arabian Business that the UAE needed fewer and larger banks if it was to compete with other financial economies across the world.

“When you live in an isolated economy you don’t need it, but today we are facing the world…we need bigger banks to survive,” said Al Qemzi.

“We should have less banks and bigger banks and we should have banks that can add value and create the right mix that can reflect what the UAE is.

“The UAE exists to serve many countries around us – we do business with the sub-continent, with the Iranians, Africa and China – we should have strong banks with links to these economies.”

Islamic banking institutions have boomed on the back of high oil prices. While few have announced losses amid the global economic downturn, growth has slowed.

In April Noor, which is 25 percent owned by Dubai’s government and 25 percent by the emirates ruler, announced profits of $139m (AED511m). But it also said it would be putting a hold on its global expansion plans.

Al Qemzi said Noor, which was established in January 2008 with plans to become a global Islamic lender, would not dismiss a merger in the future if the opportunity arose.

“Noor was born with this aspiration that we want to grow and we want to become big. If that merger meets our interests…and it has mutual benefits to us - monetary or strategically - yes we will,” he said.

He added that mergers during the economic crisis were not viable and instead financial institutions should focus on strengthening the banking system.

“I think we need to save our energy to look at the main crisis first and then after that yes, I think after that we should spare no effort to go back to look at consolidating and strengthening our banking system.”

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