United Arab Bank and Commercialbank in Strategic Alliance

The alliance, generated by the strong sisterly ties between the UAE and Qatar, represents one of the few GCC cross border agreements between two national banks. Two years ago Cb concluded a similar alliance with National Bank of Oman and this latest development sets the stage for strong growth by all three banks across the region.

Described by investment analysts from around the region as a natural strategic fit, Commercialbank made an original acquisition of 34.7% interest in (UAB) in the month of December 2007.

This original purchase of 246.9 million shares from existing UAB shareholders was made in the secondary market at the price of Dhs7.75 per share for a total transaction cost of Dhs1,913.84m.

The level of interest in UAB has been since then raised to 38.16% (as at 18.02.2008)

UAB has also agreed a Management Services Agreement with Commercialbank, which has been approved by both boards and also by the Central Bank of the UAE and Qatar Central Bank.

This is the first GCC cross-border strategic alliance between banks from Qatar and the UAE. Both Commercialbank and UAB recognize dynamic changes to the face of banking in the GCC and equally the importance of achieving critical mass, risk diversification and economies of scale as well as the opportunities to participate in the very attractive banking markets of both countries.

The Chairman of the Board of United Arab Bank, Sheikh Faisal Bin Sultan Al Qassimi, added "The alliance provides a means for both banks to support the strengthening of national economic development and bilateral economic exchange."

Commercialbank's Vice Chairman Sh. Abdullah Bin Ali Bin Jabor Al Thani said,

"The current climate of consolidation within the banking sector suggests it is increasingly necessary for regional banks to join forces to leverage local knowledge and competencies, and share services."

The Deputy Chairman of the Board of United Arab Bank, Sheikh Sultan Bin Saqr Sultan Salem Al Qassimi commented that "Our market in the UAE is extremely competitive and crowded. This alliance will enable us to adapt a more differentiated position and deliver new innovative value propositions to a wider audience of customers."

Commercialbank's Managing Director, Hussain Ibrahim Al Fardan commented that "It is gratifying that once again Commercialbank finds itself in a position of innovation with this partnership, one of a few between banks in the region. Shareholders from both banks will see higher value from stronger profit and growth potential."

The Group Chief Executive Officer of Commercialbank, Mr. Andy Stevens, added that the benefits will be seen across the board. "The board members and management of both banks will be able to contribute their valuable experience and be involved in the execution of one of the most exciting growth strategies in Gulf banking. Employees will have wider career development opportunities and even greater job security. Last but not least our customers will have the benefit of better and broader product offerings".

Mr. B. Giraud, Chief Executive Officer of UAB concluded "The two banks have very similar aspirations and this partnership will permit the natural development of cross border and operational synergies based on their complementary strengths".