Abu Dhabi: Abu Dhabi Islamic Bank (ADIB) is looking for new opportunities in Asia, Middle East and North Africa as it focuses on expansion through acquisitions and greenfield investment.
Speaking to reporters in Abu Dhabi late on Sunday, the bank’s chief executive, Tirad Al Mahmoud, said they are looking closely at Indonesia, Malaysia, Jordan, Algeria and Morocco as part of their expansion plans. He ruled out the possibility of the bank venturing into Western Europe or North America.
“We are looking at markets which are hospitable to our business like Indonesia or Malaysia. Western Europe is very competitive and overbanked. We are not looking at those markets as we cannot add value,” he said. “Indonesia is not competitive to the extent Europe is and Malaysia is not competitive to the extent Europe is and neither market is overbanked. Both markets are very hospitable to our business and they naturally want our business model. That’s why we are looking at those markets.”
Al Mahmoud added that they are operating in the United Kingdom to serve customers from the UAE but not to go after British customers and compete in the market.
“There are about quarter of a million of Emirati visitors to England and a good chunk of those buy real estate and congregate in London. We are following our customer but not going after the British market,” he said.
He did not elaborate on whether they are planning acquisition or greenfield investment but said it’s going to be acquisition if it is a retail business and greenfield if it is a corporate business. “In 2015, we don’t have any plans of a transaction. It is most likely to be in 2016 and how it would be financed depends on the size of the transaction,” Al Mahmoud said.
The bank purchased the retail business of Barclays in the UAE last year. It bid for Citi Group’s Egyptian retail business few months ago but lost out to local lender Commercial International Bank (CIB).
Al Mahmoud said there was no politics involved in the transaction and CIB was very aggressive in bidding.
On the launch of Etihad Credit Bureau in Abu Dhabi last year, he said it will bring in financial discipline and transparency.
“We are the first large bank to join the credit bureau. When all the large banks join the credit bureau then you will see financial discipline play its role. It will help the consumers and it will help the banks,” Al Mahmoud said.
Based on the information from credit bureau, he said the bank is rejecting 10 per cent of the applicants when they apply for credit. “We are preparing in anticipation of full operation of credit bureau when all banks become part of it,” he said, adding that they want to be a leading investment bank in the region.
“Since we are in the Islamic banking sector, we will play in that space issuing Sharia-complaint bonds, giving advisories. We would love to see sovereign sukuks coming in the region. It is important for us because of profitability,” Al Mahmoud said.
