HSBC Bank Middle East regional CEO Simon Cooper said that the rationale for this deal was entirely complementary with its global and regional strategy to prioritize investments where the highest potential for growth is seen.
"It is already a market where we expect to see significant growth," Cooper added.
The transaction is expected to complete during the second half of 2012 and is subject to a number of conditions, including regulatory approval.
Valued at $769m, the transition includes Lloyds’ onshore retail, commercial and corporate banking business in Dubai while the Group’s other private and expatriate offshore operations based in the UAE are not subject to the transaction, said Lloyds.
HSBC said that Lloyds business in the UAE, which is being acquired has approximately 8,800 customers and a loan book of approximately $573m.
For the fiscal year 2011, HSBC’s Middle East unit registered $728m in net profit.
Lloyds added that the transaction was in line with the Group’s strategy of reducing international presence and the impact of the sale on the Group’s accounts is not expected to be material.
The UK based bank, having 40% government stake was considering to reduce its global footprint, as its balance sheets shows negative trends and it was also vital to return the bank into profitability.
