* Potential sale may impact up to 280 employees
* British lender to keep two branches in UAE
* Sale seen attracting local UAE lenders
* Barclays follows other U.K. banks in selling UAE business
By Dinesh Nair
DUBAI, Sept 3 Barclays Plc will sell
its retail bank in the United Arab Emirates, highlighting the
challenges foreign banks face in the Gulf competing against
cash-rich local rivals who are finding it easier to meet
stricter rules on risk.
Under Chief Executive Antony Jenkins, the British bank is
axing at least 3,700 jobs globally, reining in pay of senior
bankers and closing businesses across the group in the face of
new capital rules.
It will launch its 5.8 billion pound ($9.03 billion) cash
call in two weeks, according to people familiar with the matter.
"Barclays has decided to re-focus its efforts in the UAE on
its key strengths in corporate and investment banking and wealth
and investment management," the bank said, declining to comment
The potential sale may impact up to 280 employees, a source
familiar with the plan said, adding the lender plans to offload
its retail portfolio in the Gulf Arab country, which includes
credit cards, mortgages, personal lending and deposit taking
operations, while keeping its two branches in the country.
A separate banking source confirmed that the bank was
keeping its branches to service corporate banking clients.
The global financial crisis has prompted some big Western
banks to pull in their horns, cutting their teams in the Gulf as
they focus on repairing their balance sheets back home.
Cash-rich Gulf banks are finding it easier than their
foreign counterparts to meet stricter capital and liquidity
requirements that are being imposed across the world under the
Basel III regulatory regime.
Sources had told Reuters last month that Barclays was
reviewing its retail business in the Gulf Arab, adding a sale
was the most likely option.
Any sale will attract local lenders in the UAE who are keen
to beef up their retail banking portfolios. 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.
"I am pretty positive local banks are looking at this very
closely now. I would expect the credit card business to generate
a lot of interest," a Dubai-based banking source said.
Barclays plans to sell each of its retail banking portfolios
separately, the source familiar with the process said, adding
the sale may take about 15 months to complete.
Full-time employees in the retail business will either be
made redundant or be moved to other departments, the source
said. Existing client portfolios are unlikely to be affected by
the move, the source added.
Barclays' corporate banking, private banking and investment
banking activities in the UAE were not part of the review. The
bank's retail bank in Egypt, where the lender has nearly 60
branches, is also unaffected.
The bank was the top mergers and acquisitions adviser in the
Middle East last year, according to Thomson Reuters data. It
advised the Qatar sovereign wealth fund on the $1.4 billion
acquisition of a 20 percent stake in BAA Ltd last year.
Barclays shares were up 0.6 percent in London. They have
risen 8.9 percent so far this year.