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29 March 2024

HSBC buys Lloyds’ UAE retail unit

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By Staff

 Lloyds Banking Group has agreed to sell its onshore UAE unit to HSBC, said a press statement on Thursday.

This comprises its retail, commercial and corporate banking businesses, which operate through one branch in Dubai.  This proposed sale includes all customer accounts and infrastructure. The sale is subject to regulatory approval.

The sale does not include Lloyds Banking Group’s International Wealth business in the UAE, as the Group has made a commitment to continue to invest in its Wealth business in the region to realise its growth potential. This includes its Private Banking branch in the DIFC and its offshore International Personal Banking service, which comprises its International Accounts and other associated offshore services.

Commenting on the announcement, Richard Musty, Country Head in the UAE, said: “Lloyds TSB has a long and successful history in Dubai and we are proud of what we have achieved and the performance of our business locally.  The Group’s decision to sell the onshore UAE presence follows its Group Strategic Review, announced on 30 June 2011, when it committed to simplify its international footprint.”

He added: “We remain committed to ensuring the very best customer service and care and customers will see no change in our operations during this time. We also have an enviable pool of talented professionals who remain one of our most important assets.  We are therefore also committed to keeping our employees fully updated throughout the transaction process. The quality of our customer base, and in particular our colleagues, was a key determining factor for HSBC in deciding to purchase this business from us.”

The Group undertook a strategic review of its operations in the UAE and this review determined that a sale of the onshore UAE presence would provide the best outcome for the Group and its employees, customers and shareholders.

Following a competitive sales process, HSBC was selected. HSBC’s standing as a well-known and highly regarded financial institution was an important consideration for the Group, as it wanted to ensure that customers affected by its decision to sell would continue to receive the same high quality service from the purchaser as they have received to date.

Lloyds Banking Group currently employs 256 people in the Region of which 23 currently work in its International Wealth and Wholesale operations and will be unaffected by this transaction. Until discussions with HSBC conclude and regulatory approval is received, it is not possible to state how many of the 233 employees who work in the onshore business will secure a role with HSBC.

Richard Musty concluded “We remain fully committed to our International Wealth business in the UAE which will continue to employ a highly professional and experienced team currently based in the region. We have clear growth plans for it as we firmly believe we have the right to win in the Middle East market and we will invest further in this business to help this business grow in the years ahead.”

AFP adds: HSBC on Thursday said that its Middle East unit had agreed to buy UAE-based assets worth $769 million (579 million euros) that belonged to its part-nationalised rival Lloyds Banking Group.

"HSBC Bank Middle East ... has entered into an agreement to acquire the onshore retail and commercial banking business of Lloyds Banking Group in the United Arab Emirates," the lender said in a statement.

"The value of the gross assets being acquired is $769 million as at 31 December 2011. The transaction, which is subject to regulatory approvals, is expected to complete in 2012."

The business being acquired from Lloyds Banking Group (LBG) had approximately 8,800 personal and commercial customers and a loan book of about $573 million at the end of 2011.

"HSBC is the leading international bank in the UAE and the addition of Lloyds' strong presence in retail and commercial banking is highly complementary to our business," said Simon Cooper, chief executive of HSBC's Middle East and North Africa (Mena) operations.

"The acquisition underscores the strategic importance of the UAE, and of the MENA region as a whole, to HSBC."

LBG is meanwhile offloading assets and slashing thousands of jobs after a massive British-government bailout that occurred in the wake of the global financial crisis.