PYMNTS-MonitorEdge-May-2024

First Abu Dhabi to Sell Stake in $1B Payments Unit

First Abu Dhabi, Payments, Morgan Stanley, sale, Magnati

First Abu Dhabi Bank (FAB), a public joint stock company and the largest bank in the United Arab Emirates (UAE), is looking to sell a stake in its estimated $1 billion payments division Magnati, Bloomberg reported.

The report said that FAB is collaborating with Morgan Stanley to find investors, and the bank could hold on to a piece of Magnati as part of any deal. Talks are still in progress.

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FAB was formed in 2017 following a merger between First Gulf Bank and National Bank of Abu Dhabi. It launched Magnati, its payments offering, in April as a fully-owned affiliate.

The proposed sale aligns with the current shifts in the international payments space. Banks are going toe-to-toe with bespoke providers and have been looking to sell off various divisions to stay competitive.

Private equity firms Warburg Pincus and General Atlantic, for example, bought a stake in the payments firm Network International Holdings in 2015, per the report. They took Network International public in London in 2019.

Related news: Amazon Rolls Out Dubai-Based FinTech Lab

FAB and Magnati powered the taxi hailing app WOW Electronics Transport Services with the Payit digital wallet, PYMNTS reported last month.

The Payit digital wallet gave WOW riders the ability to make cashless mobile payments for their rides. WOW also announced that it was pivoting to an all-digital, cashless payment system.

Read more: WOW Offers Digital Payments for Taxi Services

In April, FAB appointed Ramana Kumar as Magnati’s CEO. Kumar was FAB’s former group head of payments and digital banking.

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Kumar said at the time that creating a separate payment unit was part of a bigger company strategy to transition FAB from a transactional business to one that is a platform powered by data. As Magnati took off, FAB rebranded all point of sale and customer-facing devices under that name.

PYMNTS-MonitorEdge-May-2024