Abu Dhabi, Reuters—Abu Dhabi Islamic Bank (ADIB) has received regulatory approval from the United Arab Emirates central bank for its purchase of Barclays’ retail operations in the country, its chief executive said on Tuesday.
The largest sharia-compliant lender in the emirate agreed a 650 million dirham (177 million US dollar) deal with the British bank last month following a competition in which both local and international players showed interest.
ADIB received regulatory assent ten days ago and the process of migrating Barclays’ 110,000 customers in the country to the Abu Dhabi lender would begin on September 1, Tirad Mahmoud told reporters.
“We are highly confident that a super-majority of customers will migrate from Barclays to ADIB,” he said when asked if people would remain with the lender post-acquisition.
“We are optimistic because we have 80 branches, lots of services and we have overseas offices,” Mahmoud added. ADIB has a branch in Knightsbridge in London, as well as offices in Egypt, Qatar and Iraq.
UAE banks have been expanding at a time of intense competition in the Gulf Arab country, with some focusing on domestic opportunities and others going abroad.
Last week, Dubai Islamic Bank (DIB), ADIB’s main rival in Shari’a-compliant lending in the UAE, said it had agreed to buy 25 percent of Indonesian Islamic lender Bank Panin Syariah for an undisclosed amount.
ADIB was studying the possibility of making acquisitions in Southeast Asia but no decisions had been taken, Mahmoud said, declining to elaborate.
Southeast Asia is attractive for Gulf-based Islamic banks, given the significant Muslim populations in centers such as Malaysia and Indonesia but the relatively-underdeveloped Islamic finance industry in the region.
Mahmoud also said ADIB had reached a “tentative agreement” with a creditor committee set up to help negotiate a debt restructuring of Dubai-based Amlak Finance.
Amlak has been in talks with a creditor committee which includes two government entities—the Dubai Financial Support Fund and National Bonds—as well as commercial banks including ADIB for the restructuring of 7 billion dirhams of debt.
Mahmoud said on Tuesday the agreement would see repayment of the mortgage lender’s debts postponed for a period of time, although he declined to provide specifics.
It was hoped the extension of principal repayments would help the firm regain solvency and allow for a recovery in its fortunes which would prevent the need for creditors to take haircuts on the debt, he added.
A spokesperson for Amlak could not be reached for comment.