Dubai First deal is a win-win for both sides



Back then, there was no shortage of personal credit in the UAE market, with banks and credit-card companies falling over themselves to offer products to consumers intoxicated by the boom. There was always going to be tough competition for Dubai First.

As it turned out, the boom was nearing its end, with the credit crunch of 2008 turning into the credit crisis of 2009. Dubai First's launch projections were turned on their heads, and it became a matter of survival. To have achieved and maintained a 4.5 per cent share of the UAE credit market in such circumstances is no mean achievement.

Having stuck with it so long in the face of adversity, the decision to sell the business is a brave one.

Dubai Group, the arm of the Dubai Holding conglomerate that owns Dubai First and several other underperforming financial assets, will be glad of the opportunity to chip away at the US$6 billion debt mountain it is restructuring with creditors.

The $163 million or so Dubai First will knock off the total debt bill is not much in relative terms, but every little bit helps in these circumstances. Creditors to Dubai Group and other parts of Dubai Inc will be especially pleased to see the emirate willing to consider asset disposals when the price is right.

The sale is another positive sign for the restructuring of Dubai Group, which has dragged on for nearly three years but must surely be agreed imminently.

For First Gulf Bank, which bought Dubai First, the deal represents an opportunity to continue its impressive post-crisis growth.

For a good price, it gets a bigger footprint in the consumer credit market, growing once more. The challenge for the new management is to prove the 2007 vision was sound after all.

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