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.


Oil giants’ production cuts come to 1m bpd as they post massive write-downs

Updated 10 August 2020

Oil giants’ production cuts come to 1m bpd as they post massive write-downs

  • Crude output worldwide dropped sharply after the market crashed in April

LONDON: The world’s five largest oil companies collectively cut the value of their assets by nearly $50 billion in the second quarter, and slashed production rates as the coronavirus pandemic caused a drastic fall in fuel prices and demand.

The dramatic reductions in asset valuations and decline in output show the depth of the pain in the second quarter. Fuel demand at one point was down by more than 30 percent worldwide.

Several executives said they took massive write-downs because they expect demand to remain impaired for several more quarters as people travel less and use less fuel due to the ongoing global pandemic.

Of those five companies, only Exxon Mobil did not book sizeable impairments. But an ongoing reevaluation of its plans could lead to a “significant portion” of its assets being impaired, it reported, and signal the elimination of 20 percent or 4.4 billion barrels of its oil and gas reserves.

By contrast, BP took a $17 billion hit. It said it plans to recenter its spending in coming years around renewables and less on oil and natural gas.

Weak demand means oil producers must revisit business plans, said Lee Maginniss, managing director at consultants Alarez & Marsal. He said the goal should be to pump only what generates cash in excess of overhead costs.

“It’s low-cost production mode through the end of 2021 for sure, and to 2022 to the extent there are new development plans being contemplated,” Maginniss said.

London-based BP has previously said it plans to cut its overall output by roughly 1 million barrels of oil equivalent (BOEPD) by the end of 2030 from its current 3.6 million BOEPD.

Of the five, Exxon is the largest producer, with daily output of 3.64 million BOEPD, but its production dropped 408,000 BOEPD between the first and second quarters. The five majors, which include Chevron Corp, Royal Dutch Shell and Total SA, also cut capital expenditures by a combined $25 billion between the quarters.

Crude output worldwide dropped sharply after the market crashed in April. The Organization of the Petroleum Exporting Countries agreed to cut output by nearly 10 million barrels a day to balance out supply and demand in the market.