The UAE’s Dubai Islamic Bank (DIB) has raised its stake in local troubled Islamic mortgage lender Tamweel to 57.33 per cent from 20.7 per cent to enable the company to resume lending within the coming weeks.
Tamweel has not originated any new mortgages since its shares were suspended from trading in November 2008.
“The value of the acquisition is classified, but we increased our shareholding by acquiring the shares of some existing shareholders such as Istithmar and companies within Dubai Holding,” said Adnan Chilwan, chief of retail banking at DIB, speaking at a press conference on 26 September.
Chilwan said the acquisition would give DIB an estimated 30 per cent share of the UAE’s mortgage market, before adding that the bank will “definitely” be injecting more funds into Tamweel, but that the amount “depends on the needs of the market.”
The UAE government had been working on a plan to merge Tamweel with Amlak, the country’s two biggest Islamic mortgage lenders, into a single bank called Real Estate Bank.
“We remain in talks with Amlak, but I am not in a position to comment further at this time,” said Wasim Saifi, group chief executive of Tamweel. “But we expect to be originating new mortgages in the next two to three weeks and at the latest, we should be open for business on 1 November.”