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Qatari’s third-biggest lender, Commercial Bank, is in talks to sell its $217 million stake in Abu Dhabi-listed United Arab Bank, joining several Qatari companies exiting the United Arab Emirates (UAE) due to a widening Gulf rift.
The potential buyer is a UAE-based strategic investor, two sources said, without giving its name.
One of the sources said Commercial Bank (CBQ) had been considering selling its 40 percent stake in United Arab Bank even before June when Doha’s spat with some of its Arab neighbours began, but the Gulf crisis accelerated its plan.
UAE is part of a group of Arab countries that cut off diplomatic and transport ties with Doha in June.
“Obviously, the expansion strategy of CBQ hasn’t worked, but they’ve stabilised the ship, so the bank can sell (its stake) in the existing form,” Jaap Meijer, head of research at Arqaam Capital, said.
“Also, the tensions between Qatar and the UAE is a reason for the sale.”
The Qatari bank said it had entered into a 90-day period of exclusivity with a “third party purchaser” it did not name.
Commercial Bank’s stake in United Arab Bank is worth around $217 million, Thomson Reuters data showed.
Commercial Bank CEO Joseph Abraham told Reuters on Monday that board meetings at United Arab Bank were now held by video conference because of travel restrictions imposed by the UAE.
Saudi Arabia, the UAE, Egypt and Bahrain cut diplomatic and economic ties, accusing Qatar of supporting terrorism, a charge denied by Doha.
Deposits in Qatari banks from the four Arab countries have been withdrawn and Qatari banks are no longer able to raise funding there.
Other Qatari companies are also looking to scale back from the UAE. Last week Qatar Insurance said it would close its Abu Dhabi branch because it was unable to renew its business licence.
Doha Bank, Qatar’s fifth-biggest lender, has cut around 10 jobs in the UAE and its operation in the emirate has been in talks to try to sell some of its assets.
Last month, major shipping and logistics group Qatar Navigation said it was shifting its regional hub from Dubai to the Omani port of Sohar because direct shipments between Jebel Ali and Doha were no longer possible.
Companies in the UAE, Saudi Arabia and Bahrain have not so far announced formal exits from Qatar, but Qatari trade statistics suggest their exports to Doha have plunged since the crisis began.
United Arab Bank is listed in Abu Dhabi but headquartered in Sharjah. (additional reporting and writing by by Saeed Azhar; Editing by Adrian Croft)
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