Dubai Islamic Bank (DIB), the UAE’s largest Sharia-compliant lender, has acquired a 20% stake in Turkey’s TOM Group of Companies, marking its entry into the country’s banking sector. The move is part of DIB’s strategy to expand its regional footprint and offer its services to a wider range of customers. TOM Group is a digital financial services group that owns a digital bank and other fintech businesses. The acquisition, which has been approved by authorities in Turkey and the UAE, will be finalized after clearance from the Turkish Competition Authority. The value of the deal was not disclosed.
DIB’s entry into the Turkish market comes at a time when the country’s banking sector is experiencing a revival. The operating environment for banks in Turkey remains challenging, but recent government steps to move away from unconventional policymaking could ease headwinds for lenders in the country, Moody’s Investors Service said in a report last month.
Digital banking and fintech services have also grown to become a crucial platform for consumers in Turkey, allowing them to gain access to banking services from just about anywhere through mobile devices and other channels.
DIB’s investment in TOM Group is seen as a way for the bank to tap into the growing digital banking market in Turkey and reach a wider range of customers, including the underbanked and non-banked segments.
TOM Group aims to provide affordable financial services to its customers, said TOM Group chief executive Onur Ozkan. “We hope to make TOM Group a regional and a global leader in digital participation banking, aiming to provide access to financial services and promote inclusivity by encompassing segments beyond the traditional banking system,” said Mr. Ozkan.
The acquisition is also seen as a positive sign for the Turkish banking sector, as it shows that foreign investors are still interested in the market despite the recent challenges.
Analysis:
DIB’s acquisition of a stake in TOM Group is a significant development for both the bank and the Turkish banking sector. For DIB, the acquisition is a way to expand its regional footprint and offer its services to a wider range of customers. Turkey is a large and growing market with a young population, and DIB sees significant potential for growth in the country.
For the Turkish banking sector, the acquisition is a sign that foreign investors are still interested in the market despite the recent challenges. The acquisition is also a boost for digital banking and fintech services in Turkey, as it shows that traditional banks are willing to invest in these new technologies.
It remains to be seen how successful DIB will be in the Turkish market. However, the acquisition of a stake in TOM Group is a positive sign for both the bank and the Turkish banking sector as a whole.
