Mashreqbank eyes Mena acquisitions for growth

Dubai: Mashreqbank, the UAE's fifth biggest bank by assets, could consider buying other lenders in the Middle East and North Africa to help its regional expansion, its chief executive said yesterday.

"We are currently looking to acquire the Bank of Alexandria, which is the third largest bank in Egypt," Abdul Aziz Al Ghurair told reporters at the launch of Mashreq Securities' trading lounge in Dubai Internet City. He said Mashreqbank will look at acquisitions where it was possible and where it made sense.

"Of course, in the past two years price multiples were very high. Every deal that we looked at was out of reach. We are glad that we did not".

Mashreqbank, together with state-backed Dubai Investment Group, is one of six short-listed bidders for the purchase of a 75-80 per cent stake in government-owned Bank of Alexandria in Egypt. Jordan's Arab Bank Group and French bank BNP Paribas are also bidders. Al Ghurair said he expected the results of the bid to be announced in a month.

Mashreqbank recently opened a branch in Bahrain and will open another two in Qatar this year to add to its existing five in that country as part of a regional expansion. "And whenever the other GCC countries open, we will expand."

Privately-owned Mashreqbank also has plans to sell its investment products in other Gulf countries and will launch an Islamic banking service in the UAE later this year.

He said there were unlikely to be mergers and acquisitions in the banking industry in the UAE now because all banks were doing well.

Four new mutual funds around the corner

Mashreqbank plans to launch at least four new mutual funds this year, including a money market fund, to broaden its product range, the head of its capital markets division said yesterday.

Nabeel Waheed told reporters these include two open-ended country funds for Kuwait and Egypt that will invest in shares in these countries as well as an Islamic fund.

Mashreqbank's DIFC unit also plans to launch a global emerging market fixed income fund that will use a hedge-fund type long-short sales strategy. "One of the funds is a little different because it looks at the money market. We see that there are opportunities to manage short-term liquidity and people are looking at that as an alternative to a simple bank deposits," Waheed said.

Money market funds, which invest in fixed income instruments, are typically used by institutional investors but there is an opportunity for a product of this type in the retail segment as well, Waheed said.