DIB Acquires 20% Stake in Turkey's TOM Group
Dubai Islamic Bank, the UAE's largest Sharia-compliant lender in terms of assets, is acquiring a 20% share in Turkey's TOM Group of Companies, marking the country's debut into the banking industry. DIB will become a "significant minority shareholder" of Istanbul-based TOM, which operates a digital bank, with an option to grow its investment to 25% within 12 months, according to a statement issued to the Dubai Financial Market, where its shares are listed.
The transaction, which has been approved by Turkish and UAE authorities, will be formalized after permission from the Turkish Competition Authority, according to the statement. The purchase price of DIB in TOM - previously Technology of Money - was not disclosed. Aydin Group, the operator of one of Turkey's leading retail ecosystems, is TOM's initial stakeholder.
DIB's debut into the Turkish market would benefit its objective of delivering financial services to major demographic categories, including the underbanked and unbanked, according to Adnan Chilwan, global CEO of DIB.
“Central to our growth ambitions has been the bank's ability to effectively formulate winning strategies amidst shifting industry dynamics,” said Mr Chilwan.
“Our entry into the Turkish banking sector through the investment in a digital financial group represents this dynamic approach to an ever-evolving market environment we believe this deal in Turkey will lay the groundwork for further initiatives in other key strategic markets for DIB.”
DIB's entry into Turkey comes at a time when the country's banking sector is experiencing a revival, as per thenationalnews.
The operating climate for banks in Turkey remains tough, but recent government measures to shift away from unconventional policymaking may alleviate headwinds for the country's lenders, according to a study released last month by Moody's Investors Service.