Barclays to sell UAE retail arm

Barclays has signed an agreement to sell its retail arm serving expatriates in the United Arab Emirates (UAE) to a Sharia-compliant bank for a reported 650 million dirhams (£107 million).

Barclays is selling its UAE retail arm to a Sharia-compliant bank
Barclays is selling its UAE retail arm to a Sharia-compliant bank

Abu Dhabi Islamic Bank (ADIB) expects to add 110,000 customers to its existing 600,000-strong base as a result of the deal, according to a Reuters report.

A statement said that the banks would work together to ensure a "seamless transition" for customers, with ADIB offering to keep on all Barclays retail staff operating at current branches.

But there were question marks over how many customers would shift over to Islamic banking - which bans interest payments but involves structures that resemble them - according to Reuters.

It said former Barclays customers will now be asked to convert their credit card accounts, deposits and customer loans into Islamic instruments at ADIB.

ADIB's chief executive Tirad Al Mahmoud said: "This transaction is a perfect fit for our strategy as we expand into the expatriate market segment without disrupting our loyal existing customer base.

"Barclays' customers will enjoy access to one of the three largest branch networks in the country. Our shared goal, with Barclays, is to ensure that the transition is smooth and easy and we look forward to welcoming everyone to ADIB."

John Vitalo, chief executive of Barclays Middle East and North Africa operations, said: "The decision to exit the UAE retail banking space, while not taken lightly, allows us to focus on our businesses in Corporate and Investment Banking and Wealth and Investment Management.

"These businesses are strong, performing well, and have significant future growth potential."

Barclays confirmed plans to cut thousands of jobs earlier this year as it announced annual profits fell 32% to £5.2 billion.

Abu Dhabi has a significant place in the bank's history after Sheikh Mansour bin Zayed Al Nahyan - the Manchester City owner - pumped £3.5 billion into the group as part of a wider capital-raising to shore up its balance sheet and help it avoid a Government bail-out at the height of the financial crisis in 2008.

It emerged in July last year that the sheikh had sold his 7% stake in the bank.