Banking
From The Report: Dubai 2014
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The sector appears to have largely recovered from the 2008-11 economic crisis, with the first half of 2013 seeing net profits in the UAE’s banking sector rising 20% to $3.7bn, while total assets grew 8% to $517bn during the same period, although there are a number of risks that remain outstanding. The introduction of new regulations has helped to improve overall stability in the real estate market, with the Dubai Land Department doubling the transaction fee for freehold properties to 4% in order to discourage speculation in the real estate sector. Remittances offer significant opportunities due to the emirate’s large expatriate population, while high credit card penetration also creates ideal conditions for e-commerce growth.
This chapter contains interviews with Sultan bin Nasser Al Suwaidi, Governor, Central Bank of the UAE; Hesham Abdulla Al Qassim, Vice-Chairman, Emirates NBD; and Peter Baltussen, CEO, Commercial Bank of Dubai.

Articles from this Chapter

Overview

Playing it safe: Financial institutions have been able to address a raft of issues while maintaining growth
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After three years of low to modest growth, Dubai’s banking sector appears to have rebalanced itself following the 2009-11 economic crisis. Buoyed by rising asset quality throughout 2013, most of the eight national banks headquartered in Dubai have resolved legacy issues stemming from the collapse of the emirate’s property market, restructured bad loans on their balance sheets and built up substantial capital buffers to protect the sector from a repeat of the boom-and-bust cycle that precipitated…

Analysis

Cashing in: The emirate’s large expatriate population means lucrative opportunities for banks in the remittances segment
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While the volume of remittances worldwide fluctuated wildly during the recent financial crisis, Dubai has routinely bucked regional trends and benefitted from a stable flow of remittances over the past few years. According to the World Bank, worldwide remittances are estimated to have reached $406bn in 2012, up 6.5% over 2011, while the UAE saw a 9.5% increase in remittances during this period, from Dh41.2bn ($11.2bn) to Dh45.1bn ($12.2bn). According to World Bank data from October 2013, 30% of the…

Interview

OBG talks to Hesham Abdulla Al Qassim, Vice-Chairman, Emirates NBD
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Interview:Hesham Abdulla Al Qassim How will the introduction of a new credit bureau affect lending activity in Dubai? HESHAM ABDULLA AL QASSIM: Banks will be able to make more informed decisions about the creditworthiness of existing or potential customers, rather than have to rely on customer banking behaviour and customer disclosure. The credit bureau will enable a bank to analyse a potential customer’s behaviour even when that bank and customer do not have a relationship with each other.…

Analysis

Big spender: With one of the highest credit card penetration rates in the region, the emirate is ready for improved e-commerce
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The UAE boasts some of the highest internet, credit card and e-commerce penetration rates in the MENA region, making it ideal for online shopping. However, payment systems in the country are not yet at the same level of sophistication as more developed international retail markets. While credit transfers are increasingly used for salary and high-value payments, approximately 50% of UAE residents have bank accounts, meaning that cash is still the dominant medium for retail transactions, according…

Interview

Banking on reform: OBG talks to Peter Baltussen, CEO, Commercial Bank of Dubai
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Interview:Peter Baltussen How is the rapid turnaround in the corporate lending market and subsequent influx of competition expected to affect the sector’s profitability? PETER BALTUSSEN: The risk premiums that were observed post-crisis are being broken down as corporate credit ratings improve, arguably a bit quicker than expected. Nonetheless, spreads today still remain higher compared to 2008. Increased lending activity will not translate directly into net profit growth as higher revenues…