Dubai's DIB gets green light for Tamweel buy

Dubai Islamic Bank (DIB) announced its formal bid to purchase 100 percent of mortgage provider Tamweel following approval from the Securities and Commodities Authority.

Dubai’s largest Sharia-compliant lender, which already owns a 58.2 percent stake in Tamweel, will offer ten new DIB shares for 18 existing Tamweel shares held, it said in a statement Sunday.

DIB’s offer is subject to final shareholder approval and will be presented to investors on March 3.

“With the necessary regulatory approvals now in place, DIB is ready to move forward with the next stage of its bid for Tamweel,” Dr Adnan Chilwan, deputy CEO.

“This move reflects DIB’s commitment to supporting the UAE economy in general and the resurgent home finance sector in particular. We believe this offer is in the best interests of the shareholders, customers and stakeholders of both DIB and Tamweel,” he added.

In December, Moody’s placed DIB on review for possible downgrade, citing concerns over asset quality, loan loss coverage and the lender’s relatively weak capital base.

The lender posted a 33.9 percent rise in its fourth-quarter net profit earlier in the month, beating analysts’ forecasts. DIB made a net profit of AED1.19bn in 2012, it said in a statement, a 13 percent increase on 2011.