HSBC Buys Lloyds Assets In UAE
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HSBC Buys Lloyds Assets In UAE

HSBC Buys Lloyds Assets In UAE

The acquisition includes the retail, commercial and corporate banking businesses of Lloyds in the country.

Gulf Business

HSBC will be acquiring the onshore UAE unit of the Lloyds Banking Group in a deal that is expected to be completed during the second half of 2012.

The sale will include the retail, commercial and corporate banking businesses of Lloyds in the country, but will not include its international wealth-banking unit. The proposed sale includes all customer accounts and infrastructure, and is subject to regulatory approval.

“The Group’s decision to sell the onshore UAE presence follows its Group Strategic Review, announced on 30 June 2011, when it committed to simplify its international footprint,” Richard Musty, UAE country head of Lloyds said in the statement.

“Customers will see no change in our operations during this time,” he added.

According to reports, the gross assets being acquired are valued at $769 million as of the end of 2011.

Lloyds currently employs 256 people, but it said that 23 employees working in the international wealth and wholesale operations will not be unaffected by this transaction.

“Until discussions with HSBC conclude and regulatory approval is received, it is not possible to state how many of the 233 employees who work in the onshore business will secure a role with HSBC,” it said.

“We remain fully committed to our International Wealth business in the UAE,” said Musty. “We have clear growth plans for it as we firmly believe we have the right to win in the Middle East market and we will invest further in this business to help this business grow in the years ahead.”

HSBC Middle East, which recently reported a 67 per cent increase in 2011 profits to $1.4 billion (Dh5.14 billion), implemented several cost-cutting measures last year- it closed down its retail broking unit in the UAE and retail banking operations in Kuwait. HSBC Amanah also stopped operations in Qatar due to regulatory changes.

The bank also said that provisions for bad loans dropped by 53 per cent in 2011 to $293 million because of fewer restructurings in the UAE.

“Although significant unrest and political changes were witnessed in the Middle East and North Africa in 2011, the majority of the group’s exposures in the region were concentrated in our associate investment in Saudi Arabia and in the UAE, where the respective political landscapes remained stable and economic growth continued to recover,” it said in a statement.

Globally, HSBC reported that full-year pre-tax profits rose 15 per cent year-on-year to reach $21.8 billion.

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