DIB shareholders approve noor bank takeover.

Shareholders of Dubai Islamic Bank (DIB) on Wednesday approved the acquisition of its smaller Shariah-compliant rival, Noor Bank, creating one of the world's largest Islamic banks globally with Dh280 billion in assets.

In addition to positioning Dubai as a major capital of Islamic economy, the merger will also enable the Shariah-compliant bank to compete better at the global level.

As competition bites bottomline in a slowing economy and with low oil prices, banks in the UAE are in a consolidation mode to improve profitability. A Bloomberg reported had earlier said that the UAE leads the GCC banking sector with the highest number of mergers both in terms of value and volume. Currently, six mergers and acquisitions are being negotiated or underway in the UAE banking sector worth $625.25 billion, followed by two MandAs in Saudi Arabia worth $256 billion, and one each in Kuwait and Oman, it said in May 2019.

Shareholders also approved increasing DIB's capital from 6.589 billion shares to 7.24 billion in line with the approved share swap ratio of one new share in DIB for every 5.49 Noor Bank shares. This translates into an issuance of 651.15 million new shares.

In November 2018, DIB's board had approved the proposed terms of acquisition of Noor Bank. Sovereign wealth fund, Investment Corporation of Dubai, holds a stake in both the banks -28.37 per cent in DIB and 22.85 per cent in Noor Bank.

"DIB is now the UAE's biggest Islamic lender with Dh230 billion assets as of September 30, 2019...