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* Potential sale may impact up to 280 employees
* British lender to keep two branches in UAE
* Sale seen attracting local UAE lenders
* Barclays follows other U.K. banks in selling UAE business
By Dinesh Nair
DUBAI, Sept 3 (Reuters) - Barclays Plc will sellits retail bank in the United Arab Emirates, highlighting thechallenges foreign banks face in the Gulf competing againstcash-rich local rivals who are finding it easier to meetstricter rules on risk.
Under Chief Executive Antony Jenkins, the British bank isaxing at least 3,700 jobs globally, reining in pay of seniorbankers and closing businesses across the group in the face ofnew capital rules.
It will launch its 5.8 billion pound ($9.03 billion) cashcall in two weeks, according to people familiar with the matter.
"Barclays has decided to re-focus its efforts in the UAE onits key strengths in corporate and investment banking and wealthand investment management," the bank said, declining to commentfurther.
The potential sale may impact up to 280 employees, a sourcefamiliar with the plan said, adding the lender plans to offloadits retail portfolio in the Gulf Arab country, which includescredit cards, mortgages, personal lending and deposit takingoperations, while keeping its two branches in the country.
A separate banking source confirmed that the bank waskeeping its branches to service corporate banking clients.
The global financial crisis has prompted some big Westernbanks to pull in their horns, cutting their teams in the Gulf asthey focus on repairing their balance sheets back home.
Cash-rich Gulf banks are finding it easier than theirforeign counterparts to meet stricter capital and liquidityrequirements that are being imposed across the world under theBasel III regulatory regime.
Sources had told Reuters last month that Barclays wasreviewing its retail business in the Gulf Arab, adding a salewas the most likely option.
Any sale will attract local lenders in the UAE who are keento beef up their retail banking portfolios. Some British bankshave already exited retail banking in the Gulf state. In 2010,Abu Dhabi Commercial Bank, a part state-owned lender,bought the retail banking operations of Royal Bank of Scotland in a $100 million deal.
HSBC Holdings bought Lloyds Banking Group's onshore retail, corporate and commercial bankingbusiness in the UAE last year.
"I am pretty positive local banks are looking at this veryclosely now. I would expect the credit card business to generatea lot of interest," a Dubai-based banking source said.
Barclays plans to sell each of its retail banking portfoliosseparately, the source familiar with the process said, addingthe sale may take about 15 months to complete.
Full-time employees in the retail business will either bemade redundant or be moved to other departments, the sourcesaid. Existing client portfolios are unlikely to be affected bythe move, the source added.
Barclays' corporate banking, private banking and investmentbanking activities in the UAE were not part of the review. Thebank's retail bank in Egypt, where the lender has nearly 60branches, is also unaffected.
The bank was the top mergers and acquisitions adviser in theMiddle East last year, according to Thomson Reuters data. Itadvised the Qatar sovereign wealth fund on the $1.4 billionacquisition of a 20 percent stake in BAA Ltd last year.
Barclays shares were up 0.6 percent in London. They haverisen 8.9 percent so far this year.
