Barclays has agreed to sell its retail banking operations in the United Arab Emirates to Abu Dhabi Islamic Bank (ADIB) for an expected price of 650 million dirhams ($177 million), ADIB said on Sunday. The emirate's largest Islamic bank said it aimed to acquire 110,000 customers through the deal, helping it expand into serving expatriates, who comprise most of the population in the Arab world's second biggest economy. ADIB currently has 600,000 customers.
Around half-a-dozen local and international banks, including Abu Dhabi Commercial Bank, Commercial Bank of Dubai, Citigroup and Standard Chartered, had expressed interest in buying the Barclays operations, according to banking sources.
The British bank had said last September that it would offload its retail portfolio in the UAE including credit cards, mortgages, personal lending and deposit-taking operations.
Some foreign lenders have been withdrawing from retail business in the UAE as they evaluate the reach of their operations following the global financial crisis, and in light of new Basel III rules on capital.
Foreign banks also face intense competition from local banks, which are enjoying a strong recovery of the UAE economy and real estate market; they have large pools of liquidity to deploy and have targeted retail banking for its higher margins compared with corporate business.
ADIB's net profit for the whole of 2013 grew 21 per cent to 1.45 billion dirhams.