(Updates with chairman’s comment in second paragraph.)
Nov. 16 (Bloomberg) -- Rasmala Investment Bank Ltd., which has an equity research tie-up with Royal Bank of Scotland Group Plc, is in talks to raise capital, Chairman Ali al Shihabi said.
“Rasmala is in discussions with one party that has expressed an interest in investing in the company as part of a capital raise,” Shihabi said in response to e-mailed questions today. “Rasmala has 35 shareholders and some may be selling and others buying at any time” and the company has no plans to sell the business, he said.
Some banks based in the U.A.E. are cutting costs after the global credit crisis weakened lending, crimped investment banking and spurred loan defaults. Rasmala said in May it folded its private equity unit into the corporate finance business and ended retail brokerage operations. Fees earned by banks in the Middle East fell 42 percent to $320 million in the first nine months of the year from $551 million a year earlier, according to New York-based research firm Freeman & Co.
Bank of America Corp., the second-biggest U.S. lender by deposits, cut staff at its Merrill Lynch & Co. sales and trading division in Dubai by about 40 percent, two people familiar with the matter said today.
Brokerages have also been hurt as debt restructurings and Europe’s debt crisis pushed down trading volumes and values. The value of shares traded on Dubai’s stock market slumped today to the lowest since August 2004 to 19.5 million dirhams ($5.3 million), according to Bloomberg data. The benchmark DFM General Index, down 18 percent the past year, fell 0.1 percent to 1,387.13 at the 2 p.m. close in the emirate. The measure has tumbled 84 percent from a high in 2005.
Reuters earlier reported Rasmala is in talks to possibly sell the company.
--Editors: Shaji Mathew, Ash Kumar
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