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UAE intervenes in merger as property woes mount

Lin Noueihed Reuters
UAE intervenes in merger as property woes mount - Real Estate - Property - UAE


DUBAI (Reuters) - Two of the United Arab Emirates' largest mortgage lenders, already on track to merge, will be brought under a government-owned bank, the UAE finance ministry said on Sunday, in the first sign of federal government intervention in Dubai's troubled property sector.



Trading in both Amlak AMLK.DU and Tamweel TAML.DU, which have been struggling amid the global credit crunch, was suspended after the finance ministry said it would supervise their merger under the government's Real Estate Bank to ensure a fair valuation and protect shareholders.
 
"For Amlak and Tamweel it was always clear that some level of government support was necessary," said Raj Madha, a banking analyst at EFG-Hermes.
 
"There were three problems that Amlak and Tamweel were facing: funding, liquidity and solvency. A merger between the two would have made no difference to those problems but an integration with Real Estate Bank effectively addresses all three of those issues," he told Reuters.

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