Dubai: First Abu Dhabi Bank (FAB), the UAE’s largest bank, will transfer the license it has been holding for FGB (First Gulf Bank) to ADQ, the Abu Dhabi based investment holding company. This license will be used to create a digital-only bank headquartered in the emirate.
This follows the conclusion of a general assembly meeting at FAB’s headquarters, where shareholders gave their approval for the license transfer.
ADQ is set to establish the new digital bank with an initial capital of approximately Dh2 billion. Under the terms of the agreement, FAB will transfer ownership of its legacy FGB banking license to ADQ in exchange for 10 per cent of the new entity’s share capital, and preferential access to another 10 per cent of the shares in the event of an initial public offering (IPO).
In Dubai, legacy banks have launched digital-only brands, and take-up rates have been quite brisk, market sources say.
A digital necessity
“We have identified the opportunity to create a standalone digital bank to further enhance Abu Dhabi’s digital economy while strengthening our financial services portfolio," said Mohamed Hassan Al Suwaidi, CEO of ADQ. "In a world that has seen a rapid digital transformation this year, it is no surprise that there is greater demand than ever for digital banking services.
"The success of a digital bank is predicated on developing strong governance to adhere to the proper regulations, a flexible technology architecture that allows for a customer-centric journey and solid leadership experience.”