Abu Dhabi’s sovereign wealth fund Mubadala has agreed to sell digital trade finance provider Anglo-Gulf Trade Bank (AGTB) to Gulf Islamic Investments (GII), a private equity, real estate and venture capital company.
GII has acquired a 100% stake in the bank, which has sought to differentiate itself from other lenders in the market by taking a digital, data-driven approach towards trade finance, since launching in Abu Dhabi three years ago.
GII could not be reached for comment about the size of the transaction, its motivations for entering the trade finance sector, nor what the purchase means for the day-to-day running of AGTB.
But in a statement, the firm says the agreement to purchase the digital bank, which is licensed to operate within the Abu Dhabi Global Market (ADGM), is in line with GII’s objective of providing “the best” financial services solutions to investors and clients.
“Based in the innovation-friendly environment of ADGM, AGTB was set up to address a growing gap in the trade finance market, which has become highly fragmented. As the first digital bank of the ADGM, it provides its customers with technology-enabled smart banking solution[s] in a well-regulated ecosystem,” GII says in the release.
AGTB was initially set up in 2018 and touted itself as the world’s first digital trade bank, unburdened by the IT and operational legacies facing incumbent players. The lender was established as a joint venture between Mubadala and AGTB Holdings, a Rowland family-controlled company.
But, as reported by Bloomberg, the digital bank decided to rebuild and kickstarted a process to replace the Rowland family as a founding shareholder in June 2021, in the wake of disruptions caused by Covid-19.
The trade finance provider had initially laid out plans to open additional offices in the UK, Saudi Arabia, India and Asia, yet Bloomberg reports the bank never fully took off due to the effects of the pandemic on global trade.
In the early days of the project, there had been high hopes the bank could offer a new, innovative and digital approach to trade finance, with its founders having spoken of bringing tools from the retail banking space to corporate clients.
AGTB’s then-deputy CEO, Daniel Gould – who left the bank in late 2020 – told GTR at the time that the bank’s system would be 100% cloud-based, and its technology would help drive efficiency by enabling tightly integrated front, middle and back-office systems.
At the time same, he talked up plans to deploy new technologies, such as big data analytics, to better monitor and assess risk and more precisely tailor prices to customers, while the bank also joined the Marco Polo Network blockchain project in 2018.