Lloyds Banking Group, the lender bailed out by the UK government, has confirmed it is to close its operations in Dubai during the second half of 2013.
The bank said some of its 20 staff at its offices in DIFC will be offered employment at the Dubai branch of Union Bancaire Privee (UBP), the Swiss wealth manager which bought the lender’s international private banking operations as part of a $150m deal.
UBP is buying Lloyds Banking Group Plc's international private banking arm, as the British lender focuses on its domestic market in the UK.
In a statement last week, Lloyds said it will “be closing the Dubai International Finance Centre based private banking business” as part of the deal, which is worth in the region of around £100m ($151m).
Lloyds TSB Private Banking has been based in the Dubai International Financial Centre (DIFC) since 2005. “We expect that the closure of the DIFC will complete in the second half of 2013,” a London-based spokesperson told Arabian Business in a statement.
“Our Dubai business currently has approximately 20 employees. The impact on colleagues is currently under discussion at this time. So until then it would be inappropriate to pre-determine its outcome. However, there may be opportunities for some colleagues with Union Bancaire Privée’s (UBP) local operations in Dubai,” she added.
The international business being sold has assets under management of £7.2bn, 500 staff and branches in Geneva, Zurich, Monaco and Gibraltar. The bank's private banking operations in Britain were not included in the sale.
Lloyds said it would receive £100m for the business, comprising an initial £65m followed by a further £35m depending on performance in the next two years.
In relation to its clients handled by the Dubai office, the spokesperson said “Dubai client assets held in Switzerland will be transferred to UBP, subject to a number of conditions, including regulatory approval being satisfied.
The statement said: “We are starting to communicate to our clients. It is important to note that following this announcement they do not need to take any action. For now there are no immediate changes to the products or the service they can expect to receive from us.
"Their banking and investment relationship with us will continue until the transaction is completed and they will be notified in due course about the transfer of their Swiss private banking relationship to Union Bancaire Privée,” the statement added.
In November 2012, HSBC Bank Middle East Limited received the UAE Central Bank's approval for its acquisition of Lloyds Banking Group's onshore assets and liabilities in the UAE.
Abdulfattah Sharaf, CEO of HSBC UAE, said: "This announcement marks an important milestone in HSBC's history in the UAE. HSBC first opened for business here in 1946 and has a record of long term commitment and investment in the UAE.
The business acquired from Lloyds Banking Group had about 8,800 personal and commercial customers and a loan book of approximately $573m (as at the end of 2011).
The HSBC deal did does not include Lloyds’ International Wealth Business in the UAE, which encompasses the lender’s private banking branch in Dubai International Finance Centre and its offshore international personal banking service.