RBS ends plan to sell UAE transaction services to ADCB

Royal Bank of Scotland has ended its plan to sell its United Arab Emirates cash management and trade finance business to Abu Dhabi Commercial Bank, sources familiar with the matter said on Monday.

The sale would have been one of the last remaining steps in the bank’s pull-back from the Middle East as the lender, 78 per cent owned by the British government, switches focus to its home market.

But it was called off in part because ADCB, the fourth largest lender by market value in the UAE, asked at a late stage to select which of RBS’ customers it would take, one of the sources told Reuters.

Both RBS and ADCB declined to comment. The sources said they could not estimate the monetary value of the business.

RBS said at the start of July it would no longer provide transaction services to thousands of customers outside Britain and Ireland, and would instead refer them to French bank BNP Paribas. The UAE business was excluded from that process as RBS was in talks to sell it to ADCB.

But with that sale now not happening, RBS is considering several other options for the UAE transaction services business. One is selling it by auction to the highest bidder; RBS might also close the unit and refer clients either to a UAE bank or to BNP Paribas, one of the sources said. Any sale or referral would require approval from the UAE central bank.

RBS has already sold off chunks of its business in the Middle East, one of the bank’s more lucrative growth markets over the past decade.

In April, Commercial Bank of Dubai said it had purchased around Dhs 3bn ($817m) of RBS loans to companies in the UAE.

RBS sold at least part of its exposure to Dubai World as the conglomerate neared a $14.6bn debt restructuring, sources told Reuters in March.