First Abu Dhabi Bank Eyes Acquisition of Indian Private Bank
First Abu Dhabi Bank is exploring potential acquisitions in India, focusing on mid-sized private banks as part of its expansion strategy.
FAB is seeking to acquire a mid-sized private bank in India, with a preference for majority ownership.
The bank has engaged in discussions with Bandhan Bank and others, though no deal is imminent.
India's strategic location and growth potential are key factors driving FAB's interest in the market.
First Abu Dhabi Bank (FAB), the largest lender in the United Arab Emirates, is actively pursuing acquisition opportunities in India, specifically targeting mid-sized private banks. This strategic move comes a year after the Emirates NBD–RBL Bank deal, indicating FAB's intent to expand its footprint in high-growth markets. Sources familiar with the bank's strategy have revealed that while several options have been evaluated, no immediate actions are expected.
Investment bankers have disclosed that FAB's senior management has conducted meetings with potential targets, including Bandhan Bank and a bank based in Kerala. However, these discussions have yet to yield any conclusive results, and a finalized deal may still be some time away. FAB is particularly interested in banks that are trading below their book value and possess a significant scale and geographic presence.
The bank aims for a 51 percent majority stake in any potential acquisition. Current market conditions show that several mid-sized banks, such as Bandhan Bank and older private banks like CSB and South Indian Bank, are trading at or slightly below book value, making them attractive options for FAB. Despite this interest, sources caution that FAB is not necessarily considering all the banks mentioned.
FAB currently operates two branches in India, located in Mumbai and GIFT City, and has raised approximately $1.5 billion through FCNR-B deposits. The bank's expansion outside the Middle East is part of a broader strategy to diversify into high-growth markets, with India's strategic position along the East-West trade corridor being a significant factor in its decision-making. This corridor connects various markets across Asia, the Middle East, Europe, and the Americas, enhancing India's appeal as a target for investment.
The bank's interest in India is further fueled by the competitive landscape, as FAB and Emirates NBD are seen as close rivals in their home market. Observers note that when a major player like Emirates NBD makes a move, FAB is likely to follow suit. While there is no rush to finalize a deal, analysts predict that any transaction could be concluded by the end of this fiscal year or early FY28, with FAB being cautious about the pricing and structure of any potential acquisition.
