Dubai-based Amlak Finance and Tamweel will be merged into a new entity under the umbrella of the Real Estate Bank, a government owned entity, the Ministry of Finance announced on Saturday.
A spokesman confirmed that official procedures for the merger had begun with the support of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
The official line is that the merger of Amlak and Tamweel will contribute to the creation of a strong bank that will boost the property and finance markets. But that hasn't prevented rumours that both firms need each other to be able to continue lending in difficult times. Both has seen their shares hit hard by the economic downturn.
'The merger is considered a landmark development for the financial market in the UAE. It will create a new entity that will serve as a cornerstone of the real estate finance market which has great fundamentals,' the ministry spokesman said.
'The combined market expertise of both companies means that the new real estate finance entity would enhance the additional value provided to customers through quality products and special financial support,' said Nasser Bin Hassan Al Shaikh, Director-General of the Dubai Department of Finance and Board Chairman of Amlak.
And Shaikh Khalid Bin Zayed Bin Saqr Al Nahyan, Chairman of Tamweel, said the merger would enhance the trust of investors in both the financial and real estate sectors in the UAE. 'This will provide a solid ground for the UAE's economic growth, while the Real Estate Bank will benefit from the management expertise of both companies,' he said.
The two companies have combined assets of around $7 billion. Shares of the two companies were immediately suspended on the Dubai bourse pending receipt of the details of the merger.
