DUBAI: The Chief Executive of Dubai Islamic Bank (DIB) said yesterday it was in talks to buy a 40 percent stake in an Indonesian Islamic lender to help diversify its revenues.
Though DIB and other banks in the United Arab Emirates are now seeing profits rise on the back of a local economic upturn, many suffered earlier in the decade from the bursting of a local real estate bubble and big debts at Dubai’s state-linked firms, highlighting the risks of being reliant on one market.
Adnan Chilwan said yesterday that DIB hoped to conclude a deal before the end of the year and that it would pay for the purchase using its own cash reserves. “We see good potential in Indonesia,” Chilwan told a media event, declining to name the acquisition target but adding its parent was a listed company. Chilwan said in March that DIB planned to expand its operations into Indonesia, Kenya and other African countries. Indonesian Islamic lenders hold about 4.8 percent of total banking assets compared with over 20 percent for their Malaysian counterparts. Reuters