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Business Home > Archive
 
ADCB in discussions to buy RBSís retail banking operations in UAE

7 May 2010

ABU DHABI ó Abu Dhabi Commercial Bank (ADCB), the UAEís third largest bank by assets, has confirmed holding discussions with Royal Bank of Scotland (RBS) for a possible acquisition of its retail banking business in the country, its chief executive 
officer said. The retail operations of RBS consist of three branches, an ATM network and a wealth management 
business.

Edinburgh-based RBS, owned by the UK government, is exiting several businesses across the globe where it is not a market leader, as part of a strategic plan announced in 2009.

In a regulatory filing to the Abu Dhabi Securities Exchange, Abu Dhabi Commercial Bank’s Chief Executive Officer Ala’a Eraiqat said that “no definitive agreement has been reached at this juncture. No further details can be provided at this point in time,” he said on Thursday.  ADCB share price rose 0.55 per cent to Dh1.83 at the close of the day after touching a high of Dh1.84 in early trading.

The transaction is estimated to be valued at about $280 million.  Commenting on the development, M R Raghu, Head of Research at Kuwait Financial Centre (Markez), said it is too early to comment on the acquisition. “It depends on the size of the wealth management business the UK bank is offering; if it has a decent customer base, then the deal could be good for ADCB,“ he told Khaleej Times. 

RBS, the 83 per cent government-owned bank, is selling assets as part of a global plan announced in February last year to scale back its international presence.  RBS acquired the UAE consumer banking unit in 2007 after a group including RBS, Banco Santander SA and Fortis bought ABN Amro Holding NV for about $98 billion in the world’s biggest banking takeover.  The sale of the UAE unit is subject to regulatory approval.

RBS will not surrender its UAE banking licence with the sale of the unit, which includes a credit card, personal and private-banking business, and the buyer will be a bank that already has a permit to operate in the country, Simon Penney, RBS’s CEO for the Middle East and Africa, said last month.

    haseeb@khaleejtimes.com

 

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