Rasmala in potential sale talks: sources
Dubai, November 16, 2011
Rasmala Investment Bank is seeking the potential sale of its business and has reached out to several regional players to gauge interest, two sources told Reuters.
Dubai-based Rasmala, which counts Deutsche Bank among its shareholders, has offices in the UAE, Saudi Arabia, Oman and Egypt and operates in asset management, corporate finance and institutional brokerage.
Like most regional Gulf investment banks, the firm has suffered in the aftermath of the global financial crisis and amid increased competition from foreign banks.
The bank has approached Commercial Bank of Dubai and Palestine Investment Authority for a potential sale, one of the sources said, as well as other investment banks in the region.
Rasmala, with around $900 million in assets, already manages the proprietary assets of CBD under its asset management business, its website showed.
Earlier this year, the bank secured a $15 million investment from the Palestine Investment Fund, the Palestinian Authority's primary vehicle for foreign investments, for an equity fund.
Rasmala officials were not immediately available for comment. The sources spoke on condition of anonymity.
"It's going to be a tough sell for sure. Market conditions are extremely difficult and even small, boutique firms like Rasmala will find it tough going to find a partner," the source said.
Earlier this year, a slump in market turnover forced Rasmala to close its UAE retail brokerage business and to focus on institutional brokerage and research, asset management and corporate finance.
Turnover and trading volumes on the Dubai and Abu Dhabi exchanges have fallen, extending a trend that started as the global financial crisis struck in 2008.
To add to the woes, foreign banks have eaten into investment banking business emerging from advising on mergers and acquisition deals and arranging equity and debt offerings, leaving most regional banks with very little revenue streams.
Investment banking fees in the Middle East reached $316.6 million in the first three quarters of 2011, a 35 percent decline from the same period in 2010 when fees reached $483.8 million, according to Thomson Reuters data. - Reuters