Bahrain's Bank ABC is studying merger and acquisition opportunities across the Middle East and North Africa in a bid to expand its regional presence, the deputy group chief executive said.
"We are just waiting for the right time and right opportunity. We are always in the market for potential acquisitions. The board, the chairman and the shareholders all want us to do that," the deputy group chief executive, Sael Al Waary told The National.
The Arab Banking Corporation, or Bank ABC as it is known, has considered potential M&A deals in Saudi Arabia, the biggest banking market in the Arabian Gulf, and other jurisdictions in the region. As the lender is currently well capitalised, it can finance acquisitions from its own balance sheet.
We are just waiting for the right time and right opportunity. We are always in the market for potential acquisitions. The board, the chairman and the shareholders all want us to do that”
Bank ABC provides corporate banking, trade finance, project and structured finance, lending and Islamic banking services in Bahrain. The lender has also diversified into retail banking through its network of operations in Jordan, Egypt, Tunisia and Algeria.
The lender is also keen on opportunities that further strengthens its position in the North African market, even as it has an important presence in Egypt, the most populous Arab country.
Bank ABC, which reported a 5% year-on-year rise in its 2018 full-year net income to $202m, expects to see growth driven by its wholesale banking offering, including trade finance and fee-driven businesses such as cash management, and transaction banking.
"We are very strong in [the] trade finance business. We have a big volume and it contributes a high percentage to our revenues," Al Waary said. The lender has restructured its business model on three pillars: product, coverage and geography and this is the first time the bank is operating "in a very clear holistic view", he added.
The lender has invested heavily in digitising its operations and plans to launch a digital-only bank this year, which will initially focus on retail products such as credit cards.
"I'm cautiously optimistic about 2019 as the bank is investing heavily on the new platform for transaction banking. We are digitising our trade finance business and our customer experience," Al Waary said. He did not specify how much was being spent on digitisation.
Gulf banks are increasingly considering mergers and acquisitions as they look to diversify their business lines and gain scale in the face of challenging operating conditions. Société Générale is looking at Saudi Arabia as the kingdom pushes for economic transformation.