ADCB completes RBS acquisition in UAE

Abu Dhabi Commercial Bank (ADCB) announced the legal transfer of the retail banking and small and medium enterprise (SME) business of Royal Bank of Scotland in the UAE to Abu Dhabi bank.

The agreement was signed by the two banks on June 16 this year and the Central Bank approved acquisition a month back. The transition has been completed in 100 days.

Arup Mukhopadhyay, Head of Consumer Banking at ADCB, said: "The re-branding and integration efforts are in full swing and we remain confident that we will complete the entire process smoothly and as planned. RBS's retail business in the UAE is an ideal strategic fit for the consumer banking business of ADCB, and adds significantly to the two strategic growth engines of ADCB's consumer banking franchise - credit cards and wealth management. The successful completion of this acquisition has resulted in a perfect platform for building a consumer banking powerhouse in the UAE."

It is the first acquisition of an international bank's retail banking franchise by a local bank in the UAE, adding significant scale and momentum to ADCB through its strategically important consumer banking business.
The acquisition doubles ADCB's credit card business significantly enhancing its market share, as well as adding over 250,000 new retail customers to the Bank.

Following the completion of the acquisition, ADCB has become one of the top three credit card players in the country, while also having created one of the largest mass affluent businesses in the UAE. The bank remains positive about the long term growth potential of the UAE and believes that this completed acquisition offers a solid platform for value creation in the future.

Ala'a Eraiqat, Chief Executive Officer of ADCB, said: "The acquisition was undertaken in line with our key strategic objectives of strengthening our core business and market position in the UAE and I am confident it will deliver long-term value to all ADCB stakeholders."

On March 31st, 2010, ADCB had 49 branches, 175 ATMs and over 340,000 retail customers. The acquisition has further enhanced ADCB's franchise by leveraging RBS's established local retail banking presence and adding over 250,000 customers, 51 ATMs, three new branches and two customer service centres along with operations processing and a modern call centre facility based in Dubai.

ADCB said it financed the acquisition from internal cash resources. The total cash consideration was equal to the net asset value of the UAE RBS retail banking business at completion, plus $46 million.

On 31 December, 2009, the net assets of the business were approximately $54 million. For ADCB, this amounted to approximately 1.59 multiples of book value.

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