Dubai: Commercial Bank of Dubai (CBD) on Wednesday agreed to acquire a corporate loan portfolio worth approximately Dh3 billion from Royal Bank of Scotland plc (RBS) in the UAE.
The acquired portfolio consists of large UAE-based corporates. Following this acquisition, CBD plans to further develop its relationship with these corporates, and grow the portfolio significantly.
The transfer is expected to be completed during April, 2015. CBD will fund this transaction with its own funds.
Over the last year, CBD has been strategically developing its corporate and commercial banking platform, hiring key senior talent and investing in expanding its value offering across a range of segments including debt capital markets, corporate advisory, equity capital markets, treasury sales, and commodity finance.
CBD has been a major player in corporate banking business and has positioned itself to meet the demand for increasingly sophisticated services from its core historical client base. The acquisition of loan portfolio from RBS expands CBD’s presence in the very large corporates segment.
“The acquisition is another major step forward in our strategy of pursuing sustainable growth in this sector. We have made strategic investments in growing our corporate and commercial banking proposition in terms of product expertise, client coverage, client service, revenue addition and profitability. The acquisition will also further reinforce our commitment to supporting the development of the UAE corporate sector, which plays an important role in raising the country’s economic competitiveness,” said Peter Baltussen, CEO of CBD.
Total lending
In 2014 CBD’s total assets were up 5.5 per cent to Dh46.9 billion. Loans and advances increased 6.2 per cent to Dh32.2 billion at the year-end 2014. Total lending to the corporate and commercial customers increased by 3.5 per cent to Dh30.1 billion while personal banking assets grew 35 per to Dh4.5 billion in 2014 from Dh3.3 billion in 2013. CBD’s net profit for 2014 increased by 19 per cent to Dh1.2 billion compared to Dh1 billion in 2013, marking sixth consecutive year of profit growth.
CBD’s gross lending to commercial banking customers increased by 17 per cent in 2014. In the recent past the bank has been working on a strategy to achieve a more diversified and sustainable asset mix.
“This acquisition is a unique opportunity to increase our presence in the large corporates segment, particularly in Abu Dhabi, and to enhance our relationship with some of the largest and most successful companies in the UAE. These companies have outstanding credit profiles, which will contribute strongly to the overall quality of our portfolio. It is also synergetic with our recent development of investment banking products, from debt capital markets to corporate advisory and commodity finance; and will significantly contribute to our support of core UAE clients in their international growth,” said Alain Renaud, General Manager — Corporate, Commercial & Investment Banking of CBD.
