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.


China's aviation regulator raised concerns with Boeing on 737 MAX design changes

Updated 12 December 2019

China's aviation regulator raised concerns with Boeing on 737 MAX design changes

  • China is reviewing the airworthiness of the plane
  • China was first country to ground plane in March

BEIJING: China’s aviation regulator raised “important concerns” with Boeing Co. on the reliability and security of design changes to the grounded 737 MAX, it said on Thursday, but declined to comment on when the plane might fly again in China.
China is reviewing the airworthiness of the plane based on proposed changes to software and flight control systems according to a bilateral agreement with the United States, Civil Aviation Administration of China (CAAC) spokesman Liu Luxu told reporters at a monthly briefing.
He reiterated that for the plane to resume flights in China, it needed to be re-certified, pilots needed comprehensive and effective training to restore confidence in the model and the causes of two crashes that killed 346 people needed to be investigated with effective measures put in place to prevent another one.
China was the first country to ground the 737 MAX after the second crash in Ethiopia in March and had set up a task force to review design changes to the aircraft that Boeing had submitted.
The US Federal Aviation Administration (FAA) will not allow the 737 MAX to resume flying before the end of 2019, its chief, Steve Dickson, said on Wednesday.
Once the FAA approves the reintroduction into service, the 737 MAX can operate in the United States, but individual regulators could keep the planes grounded in other countries until they complete their own reviews.
“Due to the trade war, the jury is still out on when China would reintroduce the aircraft,” said Rob Morris, Global Head of Consultancy at Ascend by Cirium.
Chinese airlines had 97 737 MAX jets in operation before the global grounding, the most of any country, according to Cirium Fleets Analyzer.