Following the acquisition of a 77% majority shareholding in May 1990 by Abu Dhabi interests, BCCI undertook a major worldwide restructuring programme. This involved a radical reorganisation of the Group’s management structure and banking operations by end July 1991.
A key element of the programme was the proposed relocation of BCCI’s central management office, known internally as the Central Office, from London to Abu Dhabi. This office housed the President, senior officials and supporting staff. The restructuring also included staff reductions, branch closures and mergers, and the reorganisation of the Group’s operations into three newly capitalised and independent banks based in London, Abu Dhabi and Hong Kong. Separate companies, or a fourth bank, were also proposed to hold the Group’s non-performing loan portfolio and manage the recovery of those assets.
The Government of Abu Dhabi advised BCCI’s Board of Directors of its intention to maintain the Group’s capital base. This commitment was also reaffirmed to BCCI’s College of Regulators, which comprised the Bank of England, the Luxembourg Monetary Authority, and the central banks of Spain, Switzerland and the United Arab Emirates.
On 4 July 1991, the Abu Dhabi Government remitted a further US$650 million to BCCI as part of its financial support for the Bank. However, the chronology recorded in the Bingham Report indicates that, by 1 July 1991, certain members of the College of Regulators had already begun moving towards coordinated supervisory action that would lead to BCCI’s closure. The UAE Central Bank, although a member of the College, was not included in the key discussions leading to that action. This raises questions as to whether Abu Dhabi was fully informed of the direction already being taken when it provided the additional financial support. A more detailed examination of these events and of the Bingham Report is explored under Perspective on this website.
