Dubai's MAF explores partial credit card business sale in review

Majid Al Futtaim operates the Middle East franchise of French retailer Carrefour. (AFP)
Updated 10 October 2019

Dubai's MAF explores partial credit card business sale in review

  • MAF hired US investment bank Moelis & Co at the start of the summer to advise and manage the partial sale of its Najm credit cards, said the sources
  • The company said it continues to explore and evaluate opportunities that support the sustainable growth of its business

DUBAI: Dubai's Majid Al Futtaim, which operates the Middle East franchise of French retailer Carrefour, is exploring options for its credit card business including enlisting partners to manage unsecured credit risk, two banking sources told Reuters.
The economy in Dubai is suffering from sluggish growth due to a real estate downturn and slowing global trade, hitting white-collar jobs and consumer spending.
MAF, a holding company which also owns and operates shopping centres in the Middle East and North Africa, hired US investment bank Moelis & Co at the start of the summer to advise and manage the partial sale of its Najm credit cards, said the sources, who declined to be named.
Should a transaction follow, MAF would hold on to the data portion of the card business and its loyalty programme, while the banks would acquire the loan portfolio, the sources said.
MAF said it continues to explore and evaluate opportunities that support the sustainable growth of its business.
"We are evolving our consumer finance business, Najm, to ensure that it meets the changing needs of its customers and the growing demand for its products," it said in a statement.
"We believe that consumer finance has a strong runway for growth and fully intend to leverage this for the benefit of our customers and partners," it added.
US lender Citigroup, and UAE lenders Mashreq Bank and First Abu Dhabi Bank (FAB) have been shortlisted as bidders for the business, which is valued between $200 million and $250 million, one of the sources said.
Citi and Moelis declined to comment, while FAB and Mashreqbank were not immediately available to comment on Thursday.
The move would help MAF bring in a partner that is expert in managing credit risk, while the retail conglomerate can continue to hold onto loyalty and customer data, two sources said.
The deal could also help potentially outsource some of the IT and back office work, one of the sources said.


Dubai counts on pent-up demand for tourism return

Updated 11 July 2020

Dubai counts on pent-up demand for tourism return

DUBAI: After a painful four-month tourism shutdown that ended this week, Dubai is betting pent-up demand will see the industry quickly bounce back, billing itself as a safe destination with the resources to ward off coronavirus.

The emirate, which had more than 16.7 million visitors last year, opened its doors to tourists despite global travel restrictions and the onset of the scorching Gulf summer in the hopes the sector will reboot before high season begins in the last quarter of 2020.

Embarking from Emirates flights, where cabin crew work in gowns and face shields, the first visitors arrived on Tuesday to be greeted by temperature checks and nasal swabs, in a city better known for skyscrapers, luxury resorts and over-the-top attractions.

Tourism chief Helal Al-Marri said that people may still be reluctant to travel right now, but that data shows they are already looking at destinations and preparing to come out of their shells.

“When you look at the indicators, and who is trying to buy travel, 10 weeks ago, six weeks ago and today look extremely different,” he said in an interview.

“People were worried (but) people today are really searching heavily for their next holiday and that is a very positive sign and I see a very strong comeback.”

The crisis crushed Dubai’s goal to push arrivals to 20 million this year and forced flag carrier Emirates, the largest airline in the Middle East, to cut its sprawling network and lay off an undisclosed number of staff.

But Al-Marri, director-general of Dubai’s Department of Tourism and Commerce Marketing, said that unlike the gloom after the 2008 global financial crisis, the downturn is a one-off “shock event.”

“Once we do get to the other side, as we start to talk about next year and later on, we see very much a quick uptick. Because once things normalize, people will go back to travel again,” he said.

The reopening comes as the UAE battles stubbornly high coronavirus infection rates that have climbed to more than 53,500 with 328 deaths.

And as swathes of the world emerge from lockdown, for many travelers their holiday wish lists have shifted from free breakfasts and room upgrades to more pressing issues like hotel sanitation and hospital capacity.

With its advanced medical facilities and infrastructure, Dubai is betting it will be an attractive option for tourists.

“The first thing I’m thinking is — how is the health-care system, do they have it under control? Do I trust the government there?” Al-Marri said. “Yes they expect the airline to have precautionary measures, they expect it at the airport. But are they going to a city where everything from the taxi, to the restaurant, to the mall, to the beach has these measures in place?”

Tourists arriving in Dubai are required to present a negative test result taken within four days of the flight. If not, they can take the test on arrival, but must self-isolate until they receive the all-clear.

While social distancing and face masks are widely enforced, many restaurants and attractions have reopened with business as usual, even if wait staff wear protective gear and menus have been replaced with QR codes.

“When it comes to Dubai, I think it’s really great to see the fun returning to the city. As you’ve seen, everything’s opened up,” Al-Marri said.