Barclays stake was 'wrong decision', says Al Habtoor

Chairman of Dubai conglomerate says he would not recommend investing in European banks
Barclays stake was 'wrong decision', says Al Habtoor
Al Habtoor invested in debt-hit Barclays in 2008
By Claire Ferris-Lay
Sun 09 Oct 2011 12:33 PM

The chairman of Dubai’s Habtoor Group, which bought into British lender Barclays in 2008, has said he would never invest in a European bank again.

“Investing in a foreign bank was an experience, I’m not regretting that – we lost on it – but it was a wrong decision. Of course, if the banks are going back to be conventional [banks] like before… but now they working in everything,” Khalaf Al Habtoor told Arabian Business. 

Al Habtoor, who owns hotels in the UAE and Lebanon, was one of several GCC investors that bought into Barclays in 2008 as the UK lender looked to boost its capital amid the financial crisis.

Abu Dhabi-based investment fund PCP3 acquired a 5.2 percent stake in Barclays in February 2010, in a deal valued at £1.2bn.

Qatar in August said it planned to pump $720m into the merger of Greece’s second and third largest banks, Alpha Bank and Eurobank, as part of the Gulf state’s strategy to boost its European investments.

 But Al Habtoor said he would not recommend investing in a European bank again. 

“I would never recommend to anybody to invest in any international banks unless they go back into conventional [banking],” he said.

 The Habtoor Group on Wednesday announced plans to resume a 330-room hotel project on Dubai’s Palm Jumeirah, which was stalled in the wake of the emirate’s debt crisis. Al Habtoor said he hoped the announcement would boost confidence in the UAE construction industry.

 “My hope from this announcement is to send a strong message to investors who are hesitant to renew their faith in my country,” he said. “My announcement is a message for the people [both] in the country and outside that our country is a safe haven, our country is a place where you can invest.”

The Habtoor Group, which operates as a holding company for businesses ranging from construction, hospitality, automotive and real estate, is still interested in acquiring five-star hotels in Paris and London but is struggling to find the right property, said Al Habtoor.

“We made some investments in England - which were very successful - in some property and office buildings but always we give priority to hotels,” he said. “We are looking at hotels if we can find them in London but it’s very difficult to buy hotels in London…Paris is similar.”

Privately-held Habtoor Group expects to post a more than 15 percent increase in profits in 2011 amid higher sales in its automotive business and higher occupancy in its hotels, its chairman said.

 “In 2011 definitely there is growth but it’s always my policy to have a lot of provisions, a lot of reserves,” he said.

“[It will be] better than last year. The cumulative is more than 15 percent [compared to 2010]. The one area that is doing better is the car business and the hotels,” he said.

The company’s turnover in the first half of 2009 exceeded AED9bn ($2.45bn).

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