Amlak-Tamweel issue in final stage

Dubai: A possible merger of the UAE's largest Islamic mortgage providers, Amlak Finance and Tamweel, is in the final stages of being resolved, while the liquidation option has been taken off the table, Sultan Bin Saeed Al Mansouri, Minister of Economy, told reporters on Thursday.

Merger talks began in November between the two financing entities to come under the umbrella of the Real Estate Bank (REB), when credit-dry global markets restricted local access to funds.

"This [merger] is one of the good options to look at& [though] It has its pros and cons also.

"The other option is not to merge them, to keep them separate and let each address the issue separately.

"And the third option is liquidation, which is not an option for us now," he said.

The move, when finalised, would strengthen the real estate sector, which has faced many project delays and some cancellations.

"Recommendation to the government has been already forwarded and we are waiting for the final approval," said Al Mansouri, head of the Steering Committee, appointed by the Cabinet, on the issue.

The committee earlier said that it had completed its review of the mortgage lenders issue and that it would submit a comprehensive report to the government

The latest update has been an approval of REB's merger with the Industrial Bank by the Ministerial Council, creating a new development bank with Dh10 billion capital.

The new bank would finance industrial companies and real estate developers.

The Industrial Bank is majority owned by the federal government and several national banks have minority stakes.

Al Mansouri said the issue is not in its final state and that he is "very optimistic about the outcome of the recommendation of the committee".

He also said that the government is ready to address any liquidity issue that may arise to affect the economy in the coming months.