When Barclays decided to pull out of the UAE retail banking market in the mid-1990s, the move was prompted by a global strategic shift at the bank's UK headquarters rather than any problems with the local market as such.
In less than 10 years, the bank is set to return to the UAE retail market, and the move comes in the wake of a realisation that the UAE today represents a growth market that no ambitious bank can afford to stay out of.
Before the bank wound up its retail operations in 1996-97, Barclays had four branches in the UAE and had a presence that could well be considered significant.
The pullout resulted from a refocus by the bank on investment banking and management, which saw Barclays Capital taking a predominant position in the bank's operations worldwide.
This happened in the wake of the bank acquiring a fund manager in 1995 and its integration with BZW Investment Management to form Barclays Global Investors.
The blue-blooded British bank with a history of three centuries has since undergone further policy appraisals and the retail banking business has become a key focus in some more markets.
One of the 10 largest banks in the world in terms of capitalisation, Barclays' global presence stretches over Europe, the United States, Africa and Asia.
Since its pullout from the local retail sector, the bank has been active in Abu Dhabi, concentrating more on investment and advisory business, particularly in the government sector.
The bank has also been offering its private clients various investment management products, including hedge funds, structured products, portfolio management as well as private equity funds.
But developments in recent times, including the new boom in economy centred on massive infrastructure investments, have convinced the bank that it is time for a revisit to consumer banking.
The open market policies of the UAE government and the flexibility of its approaches have also contributed to the change in perception.
As the fist major step in the new regional strategy, Barclays proposes to make Dubai the bank's regional base.
The Dubai regional office will service the bank's business in other markets in the region, which have also benefited from high oil revenues and the resultant economic boom.
Work on the office, located near the new growth corridor of Dubai Internet City, Media City, Dubai Marina developments, is progressing apace.
In the UAE, the bank already has the Central Bank licence and therefore no further approvals are required to re-launch fullfledged retail operations. The retail business is expected to be on stream by the end of the year.
Mortgage business
According to Barclays sources, the operations will include consumer banking with all the accompanying products such as credit card, personal loans and even mortgage offerings.
The bank feels that the country's property market is set to boom further and therefore it is important to have a presence in the mortgage business as well to be able to gain acceptance as a retail player.
The bank also sees big growth prospects from the development and growth of institutions such as the Dubai International Financial Centre and the Dubai Metals and Commodities Centre.
Barclays already participates in the Dubai Commodity Receipts programme of DMCC. The bank has significant experience in commodity financing, particularly in Africa, where it provides agricultural credit to farmers as a major operation.
The crop financing operations there are supported by effective monitoring mechanisms to enable the bank's intervention at all stages of farming.
Barclays plans to put such expertise to effective use in realising the potential of DMCC, where basic commodities as well as gold and diamond offer significant business prospects for the right player.
The writer is a UAE-based journalist.
