(Updates with reasons for potential sale)
By Dinesh Nair
DUBAI Aug 13 Barclays Plc is
conducting a strategic review of its retail banking operations
in the United Arab Emirates which could lead to a sale of the
business, according to two sources familiar with the matter.
Britain's fourth-largest bank by market value confirmed on
Tuesday it was holding the review of the UAE retail business but
did not provide any further comment. The sources spoke on
condition of anonymity as the matter is not public.
Under Chief Executive Anthony Jenkins, Barclays is axing at
least 3,700 jobs, reining in pay of senior bankers and closing
businesses across the group in the face of new regulatory curbs
Since taking the top job in August 2012, Jenkins has halted
speculative trading in agricultural commodities and closed a
profitable tax advisory unit.
Foreign banks in the United Arab Emirates face increased
competition from local lenders that are cash-rich and do not
face the same capital issues as their Western counterparts. They
can lure top talent from international banks and are offering
more sophisticated banking services to clients.
The industry is crowded - the UAE central bank's website
lists 51 commercial banks operating in a country of about 8
million people, 23 of them local banks and 28 foreign lenders.
Some British banks have already exited retail banking in the
Gulf state. In 2010, Abu Dhabi Commercial Bank, a part
state-owned lender, bought the retail banking operations of
Royal Bank of Scotland in a $100 million deal.
HSBC Holdings bought Lloyds Banking Group's
onshore retail, corporate and commercial banking
business in the UAE last year.
Barclays' retail banking operations in the UAE include its
personal banking, lending and mortgage services and a credit
card business. The bank has between 500 and 1,000 staff in
retail banking but most are outsourced employees and not part of
the bank's direct payroll, one banking source said.
The source said any sale was most likely to interest local
banks in the region.
"You would expect the local banks to be the most likely
buyers of retail banking business in the region. We have seen
that in the past and most of them are in an expansion mode," the
The internal review is still at a preliminary stage and no
decision has been made on the outcome of the study, the sources
said. No outside consultants or financial advisers have yet been
hired to find potential buyers.
Barclays' corporate banking, private banking and investment
banking activities in the UAE are not part of the review,
according to the sources. In the Middle East, Barclays has
retail banking operations in Egypt aside from the UAE.
The review also does not encompass the bank's Egyptian
retail operation, which is a much larger and profitable business
than in the UAE, according to the sources.
(Additional reporting by Stanely Carvalho in Abu Dhabi; Editing
by Tom Pfeiffer)