Search for buyer will be ‘tough sell’ in current climate, says source
Rasmala Investment Bank is seeking the potential sale of its
business and has reached out to several regional players to gauge interest, two
sources familiar with the matter said.
Dubai-based Rasmala, which counts Deutsche Bank among its
shareholders, has offices in the United Arab Emirates, Saudi Arabia, Oman and
Egypt and operates in asset management, corporate finance and institutional
Like most regional Gulf investment banks, the firm has
suffered in the aftermath of the global financial crisis and amid increased competition
from foreign banks.
The bank has approached Commercial Bank of Dubai and
Palestine Investment Authority for a potential sale, one of the sources said,
as well as other investment banks in the region.
Rasmala, with around $900m in assets, already manages the
proprietary assets of CBD under its asset management business, its website
showed. Earlier this year, the bank secured a $15m investment from the
Palestine Investment Fund, the Palestinian Authority's primary vehicle for
foreign investments, for an equity fund.
Rasmala officials were not immediately available for
comment. The sources spoke on condition of anonymity.
"It's going to be a tough sell for sure. Market conditions
are extremely difficult and even small, boutique firms like Rasmala will find
it tough going to find a partner," the source said.
Earlier this year, a slump in market turnover forced Rasmala
to close its UAE retail brokerage business and to focus on institutional
brokerage and research, asset management and corporate finance.
Turnover and trading volumes on the Dubai and Abu Dhabi
exchanges have fallen, extending a trend that started as the global financial
crisis struck in 2008.
To add to the woes, foreign banks have eaten into investment
banking business emerging from advising on mergers and acquisition deals and
arranging equity and debt offerings, leaving most regional banks with very
little revenue streams.
Investment banking fees in the Middle East reached $316.6m in
the first three quarters of 2011, a 35 percent decline from the same period in
2010 when fees reached $483.8m,according to Thomson Reuters data.