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* ADCB, ADIB compete for Barclays UAE retail ops-sources
* UK bank shedding some operations globally
* Price could be low-teens multiple of earnings
* Citi, Stanchart, CBD also looked at business-sources (Adds details, context)
By Mirna Sleiman and Stanley Carvalho
DUBAI/ABU DHABI, March 19 (Reuters) - Two Abu Dhabi lendershave emerged as frontrunners to buy most of Barclays' retail banking operations in the United Arab Emirates (UAE),with a final decision expected next month after a competitivebidding process, banking sources said on Wednesday.
Abu Dhabi Commercial Bank and Abu Dhabi IslamicBank are vying to take control of the assets, thesources said, after the British lender said in September itwould offload a retail portfolio in the Gulf Arab stateincluding credit cards, mortgages, personal lending anddeposit-taking operations.
Barclays plans to retain its two branches in the UAE, whileits wealth management business would not be part of the sale.
Around half-a-dozen local and international banks, includingCitigroup, Standard Chartered and Commercial Bankof Dubai, had expressed interest in buying theoperations, said the sources who were speaking on condition ofanonymity as the information isn't public.
It was unclear if all those lenders had lodged bids and thesources gave no indication of the likely value of the sale.
"Barclays is still in the process of assessing each of thebids. Our focus is to ensure we do what's best for our customersand employees," a Barclays spokesman said without elaborating.Both ADCB and ADIB declined to comment.
HIGH INTEREST
Foreign lenders have been withdrawing from retail businessin the UAE as they evaluate the reach of their operationsfollowing the 2008-2009 financial crisis and in light of newrules on capital being brought in under the Basel III regime.
They also face intense competition from local banks, whohave significant liquidity to deploy and have targeted retailbanking for its higher margins and profitability compared withcorporate business.
However, Citi and Standard Chartered, along with HSBC, have sizeable retail banking presences in the country,which includes oil-wealthy Abu Dhabi and trade and tourismhotspot Dubai.
The high interest in the Barclays operations pushed up thevaluation substantially, according to the sources.
One, at a UAE lender which looked at the business when itfirst came onto the market but didn't bid, said he expected thefinal price to be in the high-single-digits or even low-teens interms of multiples of earnings, but gave no further detail.
ADCB, the third-largest lender in Abu Dhabi, has activelytargeted the local operations of foreign lenders in the past asit seeks to expand its franchise.
It purchased the UAE retail operations of Royal Bank ofScotland in 2010 for $100 million and was among thefrontrunners looking to buy Lloyds Banking Group's UAEbusiness in 2012 before losing out to HSBC.
For ADIB, the largest sharia-compliant bank in the emirate,questions may be raised about whether an Islamic institution canacquire the assets of a conventional lender without corruptingits principles.
However, one of the sources said this wouldn't be a problemand that the parts of the business which Barclays is selling,such as mortgages and deposits, could be easily integrated intoan Islamic bank. (Writing by David French; Editing by Andrew Torchia and DavidHolmes)
