Barclays 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. Britains 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.
Under CEO 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 on risk. 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 UAE face increased competition from local lenders that are cash-rich and do not face the same capital issues as their Western counterparts. The industry is crowded the UAE central banks 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 Groups 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 banks direct payroll, one banking source said.
The source said any sale was most likely to interest local banks in the region. 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.