DUBAI, Sept. 22 -- Abdulaziz Al-Ghurair, chairman of the United Arab Emirates (UAE) Banks Federation, said here on Monday the diversity of the financial sector is a strength of the Gulf state and that there is no need to reduce the number of lenders.

Speaking to Xinhua on the sidelines of an annual forum, which started here on Monday, Al-Ghurair said the UAE, with 23 local banks and 28 foreign ones under central bank supervision, is "not overbanked."

With the UAE banking sector growing at "phenomenal rates," Al- Ghurair said, the local lenders are no longer in need of joining forces like they were during and shortly after the global financial crisis.

He said that the strong growth in banking assets and profitability are expected to continue over the next few years.

The majority of local UAE banks have reported double-digit profit growth rates for the first half of 2014, he said. Emirates NBD, the largest lender in the Gulf state, saw its net income surging 35 percent year-on-year during the period, amounting to 1. 35 billion dirham (368 million U.S. dollars), the highest profitability growth since the global financial crisis hit the UAE in 2009.

However, Al-Ghurair, said his own bank, Mashreq Bank, which he leads as chairman and group CEO, keeps its eyes open for acquisitions in the region, though it is "not under pressure to acquire."

"If there is an opportunity we would consider it," Al-Ghurair said. "But mergers and acquisitions have its price and there is always a risk when buying other firms."

The UAE banking sector is the largest and also the most fragmented in the oil-rich Gulf region. In addition to the 51 local and foreign banks under UAE central bank regulation, the UAE also has the Dubai international financial center as a financial free zone for institutional and private banking, which hosts 350 financial firms, among them the 21 biggest banks in the world in terms of assets.

The last major merger in the UAE occurred in 2007 when Emirate Bank International and National Bank of Dubai joined hands to become Emirates NBD.

In 2012, Emirates Islamic Bank took over financially troubled Dubai Bank and eventually integrated the rival into its own structure, renaming itself Emirates Islamic.