The investment bank is expected to be set up by June in the Dubai International Financial Centre (DIFC). A CEO has already been appointed for the new company, which will employ about 50 investment bankers by the second year of operations.
NBD also expects to formalise by the end of the year plans to establish an Islamic finance company offering investment services. In the interim, new sharia-compliant products will be distributed through its private banking division.
The bank is intending to expand the activities of its subsidiary Aqarat, which started operations in early 2005.
The company will grow from managing the bank’s real estate assets to becoming a property developer.
‘It’s a diversification of the bank’s business that fits the economic environment and leverages the bank’s fixed asset base,’ said Dowie.
NBD is in negotiations with a UK mortgage broker to offer non-resident mortgages to property buyers in the UAE. In March, the Dubai government announced that foreigners would be able to buy property in the emirate in designated developments. ‘We’ve got first mover advantage. The market, potentially, is very large,’ said Dowie.
The bank is also looking at Abu Dhabi. ‘There are significant opportunities in Abu Dhabi that we’ve been slow to respond to,’ said Dowie. ‘We’ve shifted resources into the Abu Dhabi market which, traditionally, has not contributed significantly to our bottom line.’ The bank is targeting family businesses and government projects and is interested in participating in infrastructure projects and acquiring assets through syndication.
Outside the UAE, the bank is pursuing syndication opportunities in India. It is also applying to join the Qatar Financial Centre (QFC) and would consider increasing its holdings in Iran, where it operates a representative office, through an acquisition.
‘I wouldn’t hesitate to take an equity stake in a strong local bank if privatisation of the [Iranian] banking sector goes ahead,’ said Dowie.The bank has called an extraordinary general meeting for mid-June to seek shareholder approval for a 1:1 rights issue to be offered in two tranches, and a 10:1 stock split. About 1,300 million shares will be offered, raising the bank’s capital by $1,000 million.