Dubai: If Khalid Bin Kalban had his way, Dubai Investments would have had a full-fledged “digital” bank up and running in the UAE in the last three years. But that was not to be.
“Three years ago, we had announced plans for ‘Arkan Bank”,” Bin Kalban, Vice-Chairman and CEO of Dubai Investments, the holding company that has got everything from industrial parks and residential communities to industrial units. “Even though it was conceived as an investment bank, the platform we intended to have was digital. It was definitely not going to be like the conventional investment banks.
“We had collected the initial capital for Arkan and went through so many phases. Our timing, however, was not perfect – yet, the idea of a digital bank was there and we had the investors. If one such opportunity presents itself again, then it’s an area we will want to get in.” (Arkan Bank was to have an initial paidup capital of $100 million.)
Digital banking’s time has definitely come in the UAE. Licenses for standalone digital-only banks have been issued – in Abu Dhabi, there’s Al Maryah Community Bank, while Dubai should soon see the launch of Zand Bank, headed by Mohammed Alabbar. UAE banking giant ADIB has just ventured with ‘Amwali’, aimed exclusively at the Gen Z and millennials. Mashreq and Emirates NBD have their digital-only banking offshoots running for some time now.
Bin Kalban, though, is not one to rue about missed opportunities. But he does other plans to get Dubai Investments expand its financial services interests.
Dubai Investments' total income in the first-half of 2021, with property sales leading the gains
This was clearly evident when DI raised its stake in Dubai-based NGI (National General Insurance) to more than 45 per cent, buying from Emirates NBD, which had been the major shareholder in the insurer.
Bin Kalban will not stop at that. “Our aim is not be satisfied with the 45 per cent - we will write to the other NGI shareholders as we are ready to buy their stakes,” he added. “The minority shareholders I have been talking to are willing to sell, at least most of them are. Yes, we will be informing the stock market regulator about our intentions and seek their views on the planned buyout.
“We have done our job regarding the evaluation of such companies. The NGI book value is more than double of what we paid to Emirates NBD to raise the stake to 45 per cent. The way we see it, it is a win-win situation for existing NGI shareholders and for us coming in.
“We know NGI well, having been a shareholder since its inception in 2001, when we had 8 per cent.”
Expand within the financial services space – at least for the short-term, that’s the mandate DI has set for itself. But where’s the rationale to this?
“We are a general investment company and that strategy has to be always look for opportunities,” the CEO added. “If something like NGI pops up on our investment screens, we will not shy away.
“NGI delivered good results recently with Dh1.5 billion in assets and a networth of Dh500 million. It’s a very liquid company and because of all these reasons, it is a part of DI’s strategy for diversification.
“We already have a cluster in education, in healthcare, in real estate, aluminium, glass and light industries. We hoping that once the market situation improves, we should be exiting either privately or through a public offering from some of the existing subsidiaries.
“That’s how we do business. Diversify as much as we can, and if there is an acquisition, we will, if there is an exit, we will.”
Tech yes, but with limits
Dubai Investments keeps playing to its strengths, which is in traditional assets. On whether it is about time DI started thinking seriously about tech-focussed investments, Bin Kalban said: “It’s true we don’t have a direct investment in digital, but we do have a good exposure through funds as indirect investments,” he said. “Our tech sector stakes are small, but we had them for the last 20 years. But since these are not big stakes, people are not aware of it.
“Our subsidiary Al Mal Capital has a couple of funds related to high-tech. But when it comes to buying a majority or sizeable stake in a tech company, I can only say we are not qualified to do such an investment.”
Shaking off the COVID-19 disruptions, Dubai Investments delivered solid results for the first-half of 2021, with net profit at Dh302 million, up 47 per cent. Total income came in at a weighty Dh1.72 billion, with gains from the industrial, contracting and investment activities. Plus, there were more property sales as the Dubai real estate started to show improvements.
It’s flagship Dubai Investments Park keeps doing well, whether through its commercial or industrial properties or the residential. Is it time then to start thinking of another such mixed-use ‘park’ in Dubai?
“If you give me two times the land we have in DIP at some other location in Dubai, I would definitely be interested and we will fill it up in no time with investors,” Bin Kalban said. “We still have a big waiting list for land at DIP – but unfortunately we don’t have it.
“Right now, we are looking at opportunities in the other emirates – Abu Dhabi, Ras Al Khaimah. Let’s see where those plans lead to.”