First Abu Dhabi Bank considered potential bid for Standard Chartered
- Gulf bank said it was previously at the ‘very early stages’ of considering an offer for Standard Chartered, but is no longer doing so
- Standard Chartered moved to exit seven markets in Africa and the Middle East in April
First Abu Dhabi Bank, the Middle East’s biggest bank, confirmed on Thursday that it had explored previously a potential offer to acquire Standard Chartered, one of Hong Kong’s three currency-issuing banks.
The Gulf bank, whose biggest shareholders include the Abu Dhabi sovereign wealth fund Mubadala Investment Company and members of the United Arab Emirates’ ruling family, said it had previously been at the “very early stages of evaluating a possible offer” for the London-based lender, but was no longer doing so.
Standard Chartered declined to comment on Thursday.
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Shares of Standard Chartered jumped as much as 20 per cent in London on Thursday afternoon, following a Bloomberg report that cited sources saying that First Abu Dhabi Bank was exploring a bid but had not made a formal approach. Its shares rose 5.7 per cent in midafternoon trading.
Bloomberg reported that First Abu Dhabi Bank was considering a deal that would combine the two lenders into a financial firm with more than US$1 trillion in assets.
Standard Chartered’s shares hit a 52-week low in London in March, but have been trading at new highs to begin the year.
The news of a potential bid comes as Standard Chartered has been benefiting from gains in its financial markets business and rising interest rates.
It also comes as Hong Kong, its biggest market, has dropped most of its coronavirus pandemic restrictions, which should help boost the city’s economy.
The emerging markets-focused lender’s net profit rose by 50 per cent to US$964 million in the third quarter, its most-recent reporting period.
“We’re well aware of the many challenges we face across our markets, but feel well-prepared for these adverse turns if the may come. We’re assured by the evidence of the strong risk management we’ve demonstrated over the last several years,” Standard Chartered chief executive Bill Winters said on a call with analysts in October.
“Our strategy is working and our momentum should see us through the challenges we face.”
Standard Chartered has operations in 59 markets globally and had US$864 billion in assets at the end of the third quarter.
