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Dubai mortgage firms to form Islamic bank -minister
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10.9.2009 |
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A UAE state panel overseeing the restructuring of two troubled Dubai mortgage lenders is recommending merging them into an Islamic bank early next year, the UAE economy minister said.
The fate of a merger between Amlak and Tamweel has been under review by a federal government committee headed by the minister since November, when the UAE said it would merge the Islamic firms with two state-controlled banks.
"The last suggestion by the committee was that there should be an Islamic bank that will operate like any other Islamic bank, focusing more on real estate financing," Sultan bin Saeed al-Mansouri said in an interview aired by Dubai TV on Thursday.
Mansouri said the committee had a preliminary agreement that shareholders, the federal government and the government of Dubai would each own a third of the new bank, but that the cabinet would make the final decision.
Amlak, like its ailing rival Tamweel, has been suffering from dry liquidity sources halting balance sheet growth, absent or minimal property-related income and deteriorating asset quality as both were paralysed by the property collapse that hit Dubai last year.
Investors and shareholders have been waiting for news on the merger with officials repeatedly saying since March a decision on how to restructure the entities would be made soon.
"Implementation starts at the beginning of 2010," Mansouri told the station in a recorded interview obtained by Reuters.
UAE central bank governor Sultan Nasser al-Suweidi said on Monday it would take some time to look at both lenders to see what kind of institution they wish to form.
"It isn't late (the decision)... we were cautious because we wanted to protect the shareholders of the two companies and we took the decision on that basis," Mansouri said when asked why the restructuring process had taken almost a year.
In September, UAE newspaper Al Khaleej cited bankers as saying the new entity would have a capital of 5 billion dirhams ($1.36bn), doubling the 1.5 billion dirham capital of Tamweel and the one billion capital of Amlak.
A decision to merge the two firms will happen only after the government unveils a plan to restructure them, Tamweel's chairman, Sheikh Khaled Bin Zayed Al Nahyan, said in May. The shares have been suspended since November.
Emaar Properties, Dubai's biggest developer and a stakeholder in Amlak, said on Oct 5 the local property market did not need extra support from local or federal authorities.
However, when asked what the government should do to stimulate the property sector, Emaar managing director pointed to the stuttering merger between Amlak and Tamweel.
"One issue the government should finalise is Amlak and Tamweel because the property market will not work if there are no finance companies," Ahmed al-Matrooshi told Reuters.
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Source:www.arabianbusiness.com |
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