RBS to focus on $1bn-plus clients in region

The Royal Bank of Scotland (RBS) has decided to confine its operations to high-end investment banking clients in the Middle East and move away from the small and medium businesses as part of its new strategy for the region, according to a bank's top official. Talking to Emirates 24|7 recently, Simon Penney, chief executive officer of the bank for Middle East & Africa, explained that the bank will now prefer to cater to large clients with turnover upwards of $ 1billion. "We are in the process of changing clients. It is a fact that we have a significant mid market of SMEs. We will now focus on clients with cross border businesses and that have the full range of investment banking needs," Penney added. Of late, many banks in the region, including foreign institutions, have increasingly been shifting their focus to small and medium enterprises (SMEs) sector in the wake of the recession, as the pricing in that sector is quite attractive and the risk is relatively less. Many banks including the reputed foreign bank such as Standard Chartered Bank now have dedicated SME division. "We have already sold our retail operations to ADCB with the 1,000-plus staff. We are going to focus more on our corporate and investment banking and wealth management businesses, and hence servicing large clients with our full range of investment banking offerings makes better business sense to the bank," Penney said. On June 16, 2010 RBS entered into a business sale agreement with ADCB to sell its retail banking business in the UAE for a total cash consideration equal to the net asset value of the UAE's RBS retail banking business at the acquisition date, plus $46 million. "Since the actual acquisition date falls in October, the total consideration to acquire the business will be determined on the net asset value as on the acquisition date," the RBS official explained.