Commercial Bank of Qatar said on Monday it is in talks to buy a minority stake in UAE-based United Arab Bank, the latest Gulf Arab lender to join a wave of acquisitions in the region and beyond.
The talks between Qatar's second-largest lender by market value and Abu Dhabi-listed United Arab Bank will probably last about two months, Commercial Bank Chief Executive Officer Andrew Stevens told Reuters.
Across the Gulf, banks, buoyed by the economic windfall of a tripling in oil prices since 2002, are expanding overseas and making acquisitions as competition intensifies in their home markets.
In the United Arab Emirates, the second-largest Arab economy, the Dubai government is combining Emirates Bank International and National Bank of Dubai (NBD) to create the Gulf's biggest lender by assets to meet competition from regional and international lenders such as HSBC Holdings Plc and Standard Chartered Plc.
The Dubai government controls Emirates Bank and has a minority stake in NBD.
The planned investment by Commercial Bank of Qatar would be its first in the UAE and its biggest since it took a 34 % stake in National Bank of Oman two years ago.
The talks are part of the bank's strategy to "establish a regional presence through a confederation with other lenders," CEO Stevens said.
"It's an extremely well-run bank and has been profitable right from the start," he said of Sharjah-based United Arab Bank.
Elsewhere state-owned Dubai Financial said on Monday it had agreed to buy a stake of around 37 % in Bahrain's TAIB Bank and was looking to raise that to 60 %.
The stake could be worth about $273 million, based on Reuters data and the closing price of TAIB shares on May 14, when they last traded.
In Bahrain, Ahli United Bank, the country's largest lender, said on Saturday its second-biggest shareholder had asked it open its books to a $6.1 billion takeover offer from International Bank of Qatar.
The purchase would be the biggest by a foreign investor of a Gulf Arab company.
National Bank of Kuwait is in talks with Turkish Bank to take as much as a 40 % stake in what would be the second Gulf Arab purchase of Turkish bank shares in a month, after Saudi-based National Commercial Bank agreed to take over Islamic lender Turkiye Finans for $1.08 billion.
United Arab Bank operates nine branches in the UAE, including three in Dubai and one in Abu Dhabi, according to its Web site.
Its shares fell 8.5 % on Monday as foreign investors, spooked by a rout in global stock markets, sold out, sending UAE indexes into a tailspin. The stock had been up 3.6 % this year at Sunday's close.
The initial deal with Commercial Bank of Qatar still needs satisfactory completion of due diligence and to the obtaining of regulatory approvals, the two banks said in statements on the Abu Dhabi and Doha bourse Web sites.
Commercial Bank reported record profit in the second quarter, spurred by higher lending, fees and commissions. Its stock is up more than 25 % this year, outpacing the index and shares of other Qatari lenders.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.
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