Qatar's second-largest bank wins initial agreement to buy a significant stake in and manage United Arab Bank.
Commercial Bank of Qatar (CBQ) said on Thursday it had won initial agreement from shareholders of United Arab Bank (UAB) to buy a significant stake in and manage the UAE lender.
Qatar's second-largest bank by market value said in a statement it had agreed with United Arab Bank "and with a number of major shareholders, which provide for CBQ to acquire a significant shareholding in UAB, and to enter into a management services agreement." It did not specify the size of the stake or provide other details.
Commercial Bank said last month it was talks to buy a minority stake in United Arab Bank, which is based in Sharjah, UAE, and is the latest Gulf Arab lender to join a wave of acquisitions in the region and beyond.
The expected investment by Commercial Bank would be its first in the UAE, the second-largest Arab economy, and its biggest since it took a 34% stake in National Bank of Oman two years ago.
Across the Gulf, banks have been buoyed by the economic windfall of a tripling in oil prices since 2002 and are expanding overseas and making acquisitions as competition in their home markets intensifies.
In the UAE, the Dubai government is combining Emirates Bank International (EBI) and National Bank of Dubai (NBD) to create the Gulf's biggest lender by assets to meet competition from regional and international banks such as HSBC Holdings and Standard Chartered.
The Dubai government controls Emirates Bank and has a minority stake in NBD.
United Arab Bank operates nine branches in the UAE, including three in Dubai and one in Abu Dhabi, according to its website.
Commercial Bank reported record profit in the second quarter, spurred by higher lending, fees and commissions.
Its stock is up about 22% this year, outpacing the index and shares of other Qatari lenders. United Arab Bank shares are up 4.1% this year.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.