Amlak-Tamweel merger to boost mortgage business

Abu Dhabi: The merger of two largest Islamic mortgage providers in the UAE - Amlak Finance PJSC and Tamweel PJSC into a newly created $8 billion lender will ensure the mortgage business thrives in the country in the years ahead, investment bankers told Gulf News on Sunday.

"Although there is no direct economic added value to be derived out of the merger, placing both companies under one entity is the ideal strategy for the government to provide the much needed support for the two country's largest players in the mortgage finance business, a vital segment for any real estate recovery," said Rami Sidani, Head of Mena (Middle East and North Africa) Investments at Schroders Investment Management.

"Placing both companies under the Emirates Development Bank is a strong statement, indicating that the government is acting quickly to stimulate the real estate sector and provide any support needed," he added.

Tarek Qaqish, fund manager of Al Mal Capital said the merger would enhance the capability of the two companies.

"The entities will merge under Emirates Development Bank, which will be backed by the federal government and this would enhance the liquidity of both the companies," he added.

Amlak and Tamweel's chief executives' say they expect to complete the merger, first unveiled on October 4, by the end of the first quarter in 2009.