(Bloomberg) -- Dubai Islamic Bank PJSC is proceeding with plans to acquire a smaller local rival as the United Arab Emirates’ biggest Islamic lender joins a regional wave of mergers and acquisitions. The shares climbed.

The state-controlled bank’s board recommended calling a shareholder meeting to consider buying 100% of Noor Bank PJSC, it said in a statement. The deal would create a lender with about 278 billion dirhams ($76 billion) in assets.

The Middle East’s financial-services industry is going through a wave of consolidation as banks seek to improve competitiveness and boost capital amid slowing economic growth. Abu Dhabi has merged three of its banks after combining two of its biggest lenders in 2017. Banks in Saudi Arabia, Kuwait and Bahrain are also holding talks to combine.

HSBC Holdings Plc is advising Dubai Islamic Bank on the deal and Noor Bank is working with Barclays Plc, people with knowledge of the matter said last month.

Dubai Islamic Bank shares rose as much as 3%, the most in almost a month, when they resumed trading.

Investment Corp. of Dubai, the emirate’s main state-owned holding company, is the largest shareholder in Dubai Islamic Bank with a 28% stake. It’s also one of the biggest investors in the privately-held Noor Bank, which was set up in 2008.

(Updates with share move in 5th paragraph.)

To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Shaji Mathew

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