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28 September 2023

Dubai Islamic Bank, a leading financial institution in the UAE, enters Turkish digital banking and financial technology sector via an equity investment in T.O.M. Group of Companies


Dubai Islamic Bank PJSC (“DIB”), largest participation bank by asset size in the United Arab Emirates, will become a shareholder in T.O.M. Group of Companies (“T.O.M. Group”), which was established by Aydın Group shareholders.

DIB, one of the largest banking groups in the United Arab Emirates, will become a significant minority shareholder in T.O.M. Group which includes T.O.M. Katılım Bankası A.Ş. (Türkiye's First Licensed Digital Retail Bank), T.O.M. Pay Elektronik Para ve Ödeme Hizmetleri A.Ş. (Licensed e-money company with a fast-growing customer base in Türkiye), and T.O.M. Finansman A.Ş. (Licensed financing company specialized in developing innovative digital products) and their subsidiaries.

DIB’s entry strategy revolves around the acquisition of a significant minority stake into the T.O.M. Group which is an integrated, comprehensive financial services group established in the digital space. DIB will acquire 20% shareholding across T.O.M. Group with an option to increase shareholding to 25% within 12 months.

Aydın Group, T.O.M. Group’s founding shareholder with its new partner DIB, aims to make T.O.M. Group a national leader with an aspiration to grow regionally in the digital banking and financial technology sector. The shareholders core mandate is to promote financial inclusion by facilitating, easing and enhancing access to digital financial services in Türkiye.

This agreement is a clear demonstration of DIB's increased commitment and trust into Türkiye’s financial system and represents a compelling opportunity to tap into fast scaling digital banking and financial technology sector in Türkiye. DIB has long held the view that Türkiye was an attractive investment destination for a financial services institution, particularly for an Islamic bank over the medium to long term. This belief was largely premised on the attractive and robust long-term macroeconomic fundamentals of the market which fueled the country’s continued ability to attract FDI, despite short term market fluctuations. However, the key challenge for DIB had always remained the selection of the most appropriate entry strategy that would permit generation and aggregation of maximum value for the bank and its shareholders. In addition to the strong macro-economic fundamentals of Türkiye, the banking sector has also generated impressive growth post COVID, another factor in motivating DIB to positively consider this investment at this time.

DIB Group CEO Dr. Adnan Chilwan made the following remarks regarding the partnership, “Central to our growth ambitions has been the bank's ability to effectively formulate winning strategies amidst shifting industry dynamics. 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. DIB is of the view that digital banking propositions in Türkiye and other markets will enhance our efforts to provide financial services to mass population segments, including the underbanked and non-banked segments. We believe this deal in Türkiye will lay the groundwork for further initiatives in other key strategic markets for DIB.

We have been operating in Türkiye for more than 15 years as one of the largest lenders from the GCC. This investment in T.O.M. Group reiterates our commitment to the country and more so to the consumer banking sector. Türkiye holds a pivotal position in our growth strategy, considering the sizable market dynamics and the opportunities we foresee in digital banking and financial technology sector. We are confident that this partnership with T.O.M. Group will not just be mutually beneficial for our combined institutions but will also help unlock new opportunities, whilst deepening the economic ties between both UAE and Türkiye.” 

T.O.M. Group CEO Onur Özkan said, "The partnership we have established with DIB in the early stages of T.O.M. Group’s journey is highly encouraging and shows that T.O.M. Group is on track with its mission to provide affordable financial services to its customers. We hope to make T.O.M. Group, which has been established under the Aydın Group's umbrella, 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. We are proud that DIB has shown interest in our early endeavors in digital banking, recognizing the potential of Türkiye and the great team that has been scaling T.O.M. Group. We are committed to further investments in this field, aligned with our vision of becoming a leading and innovative digital finance company on a global scale.”

Aydin Group operates one of the largest retail ecosystems in Türkiye through their four flagship businesses. Customer acquisition is the key driver of returns and valuations of digital banks. Ability to leverage Aydin Group’s customer footprint has significant implications on the success of T.O.M. Group.

The transaction has been approved by the Banking Regulation and Supervision Agency (BDDK), the Central Bank of the Republic of Türkiye (CBRT) and the regulatory authorities in the UAE, and will be formalized after the clearance of the Turkish Competition Authority (Competition Authority).