News Column

United Kingdom : SALE of UAE retail arm to ADIB completed by Barclays

September 2, 2014

Barclays, the UK s second biggest bank, said it had finished the sale of its UAE retail banking business to Abu Dhabi Islamic Bank. The 119 Million (Dh726.4m) sale to ADIB, declared in April, comes as the British bank reorganizes its business following regulatory fines and decreases assets in areas where it does not have a competitive edge.

The UAE divestment is limited to a portfolio of mortgages, unsecured credit and deposits, Barclays said, adding that it is dedicated to its other businesses in the country. Simultaneously, Barclays said that it sold its Spanish retail banking, wealth management and corporate banking business in Spain for 800m (Dh3.86 billion) to CaixaBank.

The bank said that about 2,400 Barclays employees and 262 branches will be transferred to CaixaBank on completion of the sale, expected early next year following regulatory approvals.

Antony Jenkins, the Barclays chief executive said, We remain on track to rebalance Barclays as part of our strategy to deliver sustainable returns for our shareholders .

ADIB, the biggest Sharia-compliant lender in the emirate, will take on approximately 110,000 extra customers from the purchase. London-based Barclays has been decreasing assets and jobs to improve profits as it reels from the Libor interest-rigging scandal. Barclays and other banks concerned in the scandal have been forced to pay billions of dollars in fines.

Banks in the UAE, of which there are above 50, have been vying heatedly for retail customers since the financial crash of 2008 as the margins on that business are higher than loans to companies. And many of these corporates were struggling to recover from the crisis, making banks focus on individuals.

The sale to ADIB comes in the middle of greater consolidation in the banking market, particularly in the consumer divisions. Abu Dhabi Commercial Bank, which was reported to have expressed interest in Barclays, bought the retail arm of Royal Bank of Scotland in 2010 for about US$100m, adding above 250,000 customers to its business. HSBC bought Lloyds retail arm in 2012 for $769m and Emirates Islamic merged with Dubai Bank to create Emirates Islamic Bank in 2012.

ADIB, which has the 3rd biggest retail network by number of branches and ATMs in the UAE, is trying to win a greater share of the thriving consumer banking market and is also striving to make Sharia-compliant banking, which ban interest and charges a profit rate instead, more attractive to non-Muslims. The bank recently hired Phil King, a veteran Citibank executive, to head the lender s retail business and he is keen to make Islamic banking more accessible to western expatriates while keeping the bank s existing local customers happy.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: TendersInfo (India)

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters